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THE ACCOUNTING VARIABLE AND STOCK PRICE DETERMINATION

By stanley c. w. salvary

Abstract

Several tests have been conducted to determine which valuation model best fits stock price data. Given very little success, those studies suggest the need for a clear understanding of the market process of stock price determination. This paper advances the concepts of product costing and product pricing, which pertain to financial accounting valuation and the stock market price determination, respectively. This research effort presents a workable hypothesis of stock price determination.stock valuation models; fundamental value; committed finance; financial product costing; financial product pricing; 'investment base'; risk/return preferences; sequential expectations adjustment model; heterogeneous expectations; economic space.

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