| Summary: | 碩士 === 國立中興大學 === 企業管理學系研究所 === 90 === Our paper extends Ohlson (1995), and combines the partial adjustment hypothesis of dividend and Gordon’s dividend growth model, to drive three equity valuation models. We also employ the empirical data of Taiwan’s stock market to examine the usefulness of these three equity valuation models. Furthermore, we adopt these models to predict stock price, and thus investigate the forecast error of price. Our conclusions are:(1) In our three valuation models, financial assets, permanent earnings, and net cash flow from operation have positive impacts on price. That is, accounting information has social value. (2) The total debt is negative related to price, that is, the higher debt is, a lower stock price. (3) In total sample analysis, the second model, namely, incorporating net cash flow from operation, book value of equity, investment, and debt, is better than other two models. Moreover, this model is also suited to the manufacturing and building industries. (4) We employ permanent component of earnings or present discounted value of future expected earnings, namely models 1 and 2, in examining three equity valuation models, both models are better than model 3. This means current earnings maybe not an appropriate basis in equity valuation model.
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