Ungarbled earnings and dividends. An analysis and extension of the Beaver, Lambert, and Morse valuation model

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This paper examines the Beaver, Lambert, and Morse (1980) valuation model that capitalizes 'ungarbled' earnings. The analysis identifies the model's unspecified capitalization factor, and it emphasizes that a complete model of ungarbled earnings must focus on the joint stochastic behavior of earnings and dividends. It is shown that expected ungarbled earnings, scaled for a constant, equal expected dividends. Except for the scale factor, no apparent economic reasons suggest that ungarbled earnings are any different from dividends.
Original languageEnglish
Pages (from-to)109-115
Number of pages7
JournalJournal of Accounting and Economics
Issue number2-3
Publication statusPublished - 1 Jan 1989
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Economics and Econometrics
  • Finance

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