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5. Results and Applications of Research
5.1. Results of Research
In this research, the applicability of two adjusted versions of Ohlson model (1995) and two adjusted
versions of Feltham-Ohlson model (1995) was studied to forecast abnormal earnings and firm’s value
within the framework of two studied assumptions. The first hypothesis involves in the confirmation of
the four models considered to forecast the abnormal earnings of each period by the abnormal earnings of previous period and the second one pays to the favorability of these models to estimate the firm’s
value with using discounted abnormal earnings of previous periods. These models are segregated into
two general categories of traditional and sign-oriented. The only difference of these two categories is
that the design of the sign-oriented models (second and fourth models) is so that it may be possible to
obtain different coefficients for positive and negative abnormal earnings. The reason is that according
to Giner and Iniguez (2006) the negative abnormal earnings, unlike the positive ones, have temporary
persistence and, as a result, a coefficient close to zero. Thereby, the segregation of earnings in term of
their sign, and the calculation of a separate coefficient would improve the models’ efficiency in
forecast and valuation.
The research results indicate the confirmation of models’ efficiency in the prediction of
abnormal earnings in four studied modes. This results conform to the most researches conducted
outside of Iran, i.e. Ohlson (1995), Ota (2002), McCrae and Nilsson (2001), Choi et al.(2001) and
Callen & morel(2001) and conflict with the results of research made by Callen et al. (2002). And, also,
comply with the results of research made by Khodadadi et al. (2005) involving in the review of linear
information models in Iranian firms. Nevertheless, similar to the result of research made by Myers
(1999), none of these models have succeeded to forecast the value of firms listed on Tehran Stock
Exchange. The ground of this non achievement is not the weakness of these models, because stock
prices may have no scientific and theoretic backup in Tehran Stock Exchange. Since the studied
models’ values in most cases are underestimated (similar to the results of researches made by Myers
(1999), Dechow et al. (1998) and Frankel and Lee (1998)) the possibility of the existence of price
International Research Journal of Finance and Economics - Issue 36 (2010) 72
bubble in Tehran Stock Exchange Organization is not far-reaching. The study of above-mentioned
cases, in turn, requires more empirical researches.
Also, results obtained from the comparison of four studied models of this research indicate the
superiority of sign-oriented models to traditional models to forecast abnormal earnings. This result is a
support to the claim of Giner and Iniguez (2006), On the other hand, though the results show a better
function of traditional models in the firm valuation process, the determination of the superior model is
not simply possible in this respect because of non-ability of all four models in the estimation of firm’s
value. Making decision in this respect requires more researches to be made in w本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。