The relevance of valuation models: insights from Palestine exchange

What is it about?

In the literature, there exist two common practices related to valuation: one is to compare the relevance of RIM with the cash flow models; the other is a value relevance practice using the RIM and accounting for the information dynamics. However, the comparison with market models is missing; therefore, this paper fills this gap and build on the previous works by comparing the relevance of two groups of models, the accounting-based models derived from the RIM and the standard market model, on price, return, and volatility. These aspects are fundamental in contributing to the originality of this paper, which would be the first of its kind to test and compare the relevance of market-based and accounting-based models, at least in an emerging market context such as PEX Murad Harasheh murad.harasheh@unimib.it

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