University of Isfahan Journal of Asset Management and Financing 2383-1189 5 1 2017 03 21 Development of the Ohlson (1995) Prediction An Valuation Models with the Consideration of Bankruptcy Risk Development of the Ohlson (1995) Prediction An Valuation Models with the Consideration of Bankruptcy Risk 99 116 21155 10.22108/amf.2017.21155 FA Vali Khodadad Accounting Dept., Faculty of Economics and Social Sciences, Shahid Chamran University of Ahvaz, Ahvaz, Iran. S. Ali Vaez Accounting Dept., Faculty of Economics and Social Sciences, Shahid Chamran University of Ahvaz, Ahvaz, Iran. Mohammad Reza Emami تهران، خیابان خالد اسلامبولی(وزرا)، خیابان شماره 23، پلاک 5 ، طبقه چهارم، تلفن: 88498849 داخلی 629 نمابر: 89781728 Journal Article 2015 03 07 Accounting earnings and the continuous operation assumption are two principles of Ohlson’s (1995) prediction and valuation models. Regarding the influence of bankruptcy risk on these two factors, in this research, these models are adjusted by the inclusion of bankruptcy risk. As a result, the primary models are compared with adjusted models during a 5-year (from 2003 to 2008) and a 10-year period (from 2003 to 2013) using panel data of companies listed in the Tehran Stock Exchange. The results indicate that the inclusion of the bankruptcy risk improves Ohlson’s prediction and valuation models during both 5 and 10 years estimated periods. However, due to the uncontrolled growth of prices in 2012 and 2013, which resulted in the price bubble formation, the estimated values by both original and adjusted models during 10 years estimated period are significantly lower than the actual market values. <br />  Accounting earnings and the continuous operation assumption are two principles of Ohlson’s (1995) prediction and valuation models. Regarding the influence of bankruptcy risk on these two factors, in this research, these models are adjusted by the inclusion of bankruptcy risk. As a result, the primary models are compared with adjusted models during a 5-year (from 2003 to 2008) and a 10-year period (from 2003 to 2013) using panel data of companies listed in the Tehran Stock Exchange. The results indicate that the inclusion of the bankruptcy risk improves Ohlson’s prediction and valuation models during both 5 and 10 years estimated periods. However, due to the uncontrolled growth of prices in 2012 and 2013, which resulted in the price bubble formation, the estimated values by both original and adjusted models during 10 years estimated period are significantly lower than the actual market values. <br />  https://amf.ui.ac.ir/article_21155_0ce2f801985c79cbd04b6ca00703df41.pdf