A PROPOSED ARCHIVAL EMPIRICAL RESEARCH METHODOLOGY TO TEST RELIABITIY AND VALIDITY OF DISCOUNTED RESIDUAL INCOME MODEL

Min Shirley Liu

doi:10.46281/ijafr.v6i2.1062

Min Shirley Liu BC http://orcid.org/0000-0002-7780-1100

DOI: https://doi.org/10.46281/ijafr.v6i2.1062

Keywords: Residual Income Mode, Archival Empirical Research Method, Value of Equity, Publicly Listed Stock.

Abstract

Kerlinger and Lee (2000) defines reliability as “the proportion of the ‘true’ variance to the total obtained variance of the data yielded by a measuring instrument” and content validity as “representativeness or sampling adequacy of the content—the substance, the matter, the topic of measuring instrument”. The goal of this research is to provide an empirical research method to quantify the reliability and validity of residual income model in the prediction of the value of equity (stock price), by proposing to compare all active U.S. firms from 1981 to 2005 traded in the NYSE and the AMEX (the time period and listed stocks are subject to change based upon the availability of data from different sources).

JEL Classification Codes: G10, G17, M41, Z10.

Author Biography

Min Shirley Liu, BC

Assistant Professor, Department of Accounting, Brooklyn College-CUNY Brooklyn, New York, United States

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