Accounting Rules , Equity Valuation , and Growth Options ∗

  • Dmitry Livdan
  • Published 2015

Abstract

In a model with irreversible capacity investments, we show that nancial statements prepared under replacement cost accounting provide investors with su cient information for equity valuation purposes. Under alternative accounting rules, including historical cost and value in use accounting, investors will generally not be able to value precisely a rm's… (More)

Topics

1 Figure or Table