Extending An Accounting Information System Learning Aid To Firm Valuation

Abstract

This article reports a case on firm valuation. Students are required to determine the fair market value of a company’s stockholders’ equity by projecting the company’s earnings and then discounting the projected earnings to a present value. The case extends an earlier case on the accounting information system and allows students to visualize the effects of future earnings and cost of capital on firm valuation. Student perceptions of the case were very favorable.