Discussion of “Modeling Goodwill for Banks: A Residual Income Approach with Empirical Tests”*

2010 ◽  
Vol 23 (1) ◽  
pp. 69-71 ◽  
Author(s):  
Russell J. Lundholm
Keyword(s):  
Residual Income ◽  
Income Approach ◽  
Empirical Tests ◽  
Residual Income Approach

scholarly journals DETERMINING HOUSING AFFORDABILITY FOR YOUNG PROFESSIONALS IN KLANG VALLEY, MALAYSIA: RESIDUAL INCOME APPROACH

2018 ◽  
Vol 16 (6) ◽  
Author(s):  
Nor Suzylah Sohaimi ◽  
Alias Abdullah ◽  
Syafiee Shuid
Keyword(s):  
Household Income ◽  
Simple Random Sampling ◽  
Well Being ◽  
Housing Affordability ◽  
Residual Income ◽  
Urban Planner ◽  
Young Professionals ◽  
Income Approach ◽  
Klang Valley ◽  
Residual Income Approach

Underprivileged young professionals in housing affordability are prone to an adverse effect on their well-being. This article empirically examines housing affordability among young professionals aged between 25 and 35 years old who work or live in Klang Valley. Young professionals in this paper refer to young graduates with at least a Bachelor’s degree and are registered to professional institutions such as the Institution of Engineers Malaysia (IEM), Malaysian Institute of Architects (MIA), Malaysian Institute of Planners (MIP), and Royal Institution of Surveyor Malaysia (RISM). The aim of this study is to measure housing affordability based on residual income approach and to identify the attribute that affects young professionals’ housing affordability. Adequacy of household income for monthly mortgage or rent as well as other non-housing goods is reflecting for housing affordability. Attributes namely occupation, the presence of children, household expenditure, transportation cost, vehicle instalment, education loan, and household income are analysed by using binary logistic regression. 264 respondents who are either a homeowner, tenant, or parental home resident were selected by using simple random sampling. The survey data were collected through the professional institutions respectively. The study found that only presence of children, occupation of urban planner and education loan III (not taking a loan) were insignificant to the model.

scholarly journals Dividend policy and market value of banks in MENA emerging markets: residual income approach

2020 ◽  
Vol 4 (1) ◽  
pp. 25-45
Author(s):  
Akram Ramadan Budagaga
Keyword(s):  
Emerging Markets ◽  
Dividend Policy ◽  
Market Value ◽  
Residual Income ◽  
Content Type ◽  
Financial Firms ◽  
Market Values ◽  
Investment Opportunities ◽  
Income Approach ◽  
Residual Income Approach

PurposeThis study will examine the impact of cash dividends on the market value of banks listed in Middle East and North African (MENA) emerging countries during the period 2000–2015.Design/methodology/approachThe current study adopts residual income approach based on Ohlson's (1995) valuation model. By testing different statistical techniques, fixed effect is applied on panel data for (144) banks listed on 11 MENA stock markets over the period 2000–2015. Furthermore, additional tests are applied to confirm the primary results.FindingsThe analysis reveals that current dividend payouts and dividend yield do not provide information relevant to the establishment of market values in MENA emerging markets; thus, they have no material impact on MENA banks' market values. This lack of current dividend payment effect is consistent with Miller and Modigliani (1961) dividend irrelevance assumption: there is no evidence of either an informational or real cash inflow effect of current dividend payments. The findings of this study can be attributed to the fact that MENA banks may be forced to place more emphasis on allocating money for investment instead of paying dividends given them they are subject to liquidity requirements for investment, expansion, general operations and compliance with regulations. Only after all these financial needs are covered can the remaining surplus be distributed as cash dividends. Therefore, cash dividends represent earnings residual rather than an active decision variable that impacts a firm's market value. This is consistent with the residual dividend hypothesis, which is the crux of Miller and Modigliani (1996) irrelevance theory of dividends.Research limitations/implicationsThe current study is restricted to a sample of one type of financial firms, banks, because of the problem of missing data and limited information related to other financial firms for the same period. Therefore, further research could be additional types of financial firms such as insurance firms that play a vital role in MENA emerging economies.Practical implicationsThe results of this study have some important implications for banks' dividend policymakers. Dividend policymakers in MENA emerging markets seem to follow residual dividend policy, in which they distribute dividends according to what is left over after all acceptable investment opportunities have been undertaken. This makes for inconsistent and unstable dividend policy trends, making it difficult for investors to predict future dividend decisions. Further, this practice may deliver information to shareholders about a lack of positive future investment opportunities, and this may negatively affect the share value of banks.Originality/valueThis study is the first of its kind – up to the author's knowledge – that examines a large cross-country sample of MENA banks (144) to cover a long time period in the recent past, and, more importantly, after the banking sector in the region has experienced major transformations during last two decades. In addition, most of the MENA region countries included in this study, namely, banks, operate in tax-free environments (there are neither taxes on dividends nor on capital gains). This feature adds complexity to the ongoing dividend debate.

Residual Income Approach to Equity Country Selection

2007 ◽  
Vol 63 (2) ◽  
pp. 76-89 ◽  
Author(s):  
Stéphanie Desrosiers ◽  
Natacha Lemaire ◽  
Jean-François L’Her
Keyword(s):  
Residual Income ◽  
Income Approach ◽  
Country Selection ◽  
Residual Income Approach
Sign in / Sign up

Export Citation Format

Share Document