A comparison of the earnings capitalization and the excess earnings models in the valuation of closely-held businesses.: An article from: Journal of Small Business Management

This digital document is an article from Journal of Small Business Management, published by International Council of Small Business on January 1, 1996. The length of the article is 6661 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the supplier: The earnings capitalization model (ECM) and the excess earnings model (EEM) were compared in terms of their ability to value closely-held businesses. Both the ECM and the EEM value business assets by examining the current value of expected income associated with assets. However, the ECM assumes that future earnings are homogeneous with regard to risk, while the EEM assumes future earnings to be heterogeneous. Results revealed the EEM to provide better estimates and lower errors compared to the ECM.

Citation Details
Title: A comparison of the earnings capitalization and the excess earnings models in the valuation of closely-held businesses.
Author: Nicholas J. Mastracchio
Publication:Journal of Small Business Management (Refereed)
Date: January 1, 1996
Publisher: International Council of Small Business
Volume: v34 Issue: n1 Page: p1(12)

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