ABSTRACT
This study tested and compared the five most common theory models that are used in determining the value of a firm: the clean surplus approach Feltham et al. (1995); the dividend approach (Gordon, 1962); the earning approach (Beaver, 1981); the cash flow approach (Miller et al., 1961); and the capital approach (Tobin, 1971). The statistical test used in the study were using Analysis of Variance; and the post-hoc test. An ANOVA test was used to find the inequality between firm’s values derived from the theory models with the actual value of a firm. The post-hoc test is known as one of the best theory models to predict the value of other theory models. This study provides evidence that the results of the calculations against five assessment theory models gave different results and stated that the clean surplus is the best theory model to predict the value of other theory models.
