Following the seminal theoretical work of Ohlson (1995), many researchers have tried to investigate the linear information dynamics (LID) models validity empirically. However, empirical applications of the LID approach to residual income (RI)-based equity valuation have produced estimates of firm value that are substantially lower on average than corresponding observed market values. This book augments the Ohlson model by incorporating residual income and other information intercepts into the original linear information dynamics, in order to capture the impact of the intercept...