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FUNDAMENTAL VALUATION OF EXTRA-FINANCIAL INFORMATION
Download This ArticleChristian Mandl, Sebastian Lobe, Klaus Röder, Martina Dürndorfer
Abstract
We augment seminal models based on Ohlson (1995) by integrating the value impact of ratings related to three different extra-financial categories, i. e. corporate governance, human capital, and innovation capital. By integrating extra-financial information in valuation models, we examine whether current market values can be better estimated and future stock performance better predicted when considering this information. For a sample of large European public firms, we find that a model including human capital information and analysts’ earnings forecasts best explains current stock prices. Our model based on human capital information (without analysts’ forecasts) best identifies under- and overvalued companies.
Keywords: Capital Markets, Corporate Governance, Extra-Financial Information, Human Capital, Information Dynamics, Innovation Capital, Intangibles, Ohlson Model; Residual Income, Valuation Models
How to cite this paper: Mandl, C., Lobe, S., Röder, K., & Dürndorfer, M. (2010). Fundamental valuation of extra-financial information. Corporate Ownership & Control, 8(1-2), 296-320. https://doi.org/10.22495/cocv8i1c2p4
