Multinationality, Profitability and Firm Value

Article Abstract:

Keywords: Profitability, Valuation Models, Multinationality, Prediction This study examines the role of multinationality in the prediction of future profitability and firm valuation. The results indicate that multinationality does not provide much information about future profitability incremental to that provided by current profit rate. However, multinationality explains cross-sectional differences in market value incremental to those explained by book value and current profit rate.

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The Substitution of Net Value Added for Earnings in Equity Valuation

Article Abstract:

Keywords: Net Value, Equity Valuation. Data, Analysis This study provides first a test of the descriptive validity of the Feltham and Ohlson (1995) model. In addition it shows that when net value added is substituted as a measure of wealth for earnings, the resulting accounting valuation model is better descriptive than the conventional Feltham-Ohlson (1995) model.

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Multinationality and profitability: the contingency of the investment opportunity set

Article Abstract:

A study of the correlation between a firm's multinationality and its profitability showed that higher degrees of multinationality can increase a firm's profitability. This is due to the advantages brought by arbitrage benefits, financing bargains, capital availability and economies of scale. A firm's high degree of multinationality also results in its high investment opportunity set, with the firm's multinationality serving to cater to the interest of investors in the places where the firm has established a clear and profitable presence.

Multinational Corporations, International business enterprises, Risk (Economics), Investments

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