On the Theory of Forecast-Horizon in Equity Valuation

James Ohlson and X.-J. Zhang

Working Papers from Columbia - Graduate School of Business

Abstract: This paper analyzes how a horizon date affects valuation. We focus on valuation errors that arise because of the horizon, and we assess the magnitudes of such errors. A model due to Ohlson (1995) specifies the information environment. Forecasting of future financial outcomes depends on two kinds of information: current accounting data - earnings, book value, and dividend - and "other", idiosyncratic, information.

Keywords: EQUITY; ACCOUNTING; INFORMATION (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Pages: 19 pages
Date: 1997
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:colubu:97-14

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