Issue 1, 2005

Bukhvalov A. V., Volkov D. L. Study on Interrelation between Fundamental Value and Market Capitalization of Russian Companies

The article analyzes connection between market capitalization and equity fundamental value of a company calculated basing on accounting data according to residual earnings model. The analysis is based upon the methodology and results of developed markets investigation. It is concluded, that book values of equity and residual earnings as components of residual earnings model can explain market stock prices also on Russian market. The conclusion gives interpretation to the results in qualitative and quantitative aspects and defines directions of future investigations.

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