Issue 4, 2004

Volkov D. L. Value-Based Management: The Problem of Choice of Relevant Valuation Model

This article examines main models of fundamental equity valuation. These models are compared according to comparison criteria developed by the author. Following conclusions were done on the basis of analysis of these models. First, theoretically these models give equal results, but they are not equivalent from the view of possibilities of their application in financial management practice. Second, from the point of value-based management concept the model of residual earnings should be recognized as the most relevant.

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