Paper Title
Testing Ability Of Walter And (Lerner & Carleton (L&C)) Models In Identifying The Real Stocks Prices In Palestine Exchange
Abstract
The research aims to identify the explanatory ability of the Walter and (Lerner and Carleton)Models in determining stock prices, and to better clarify the best and most convenient Model to Palestine Exchange. The study sample included (28) companies and the Financial method was used to determine stocks of companies that priced less and more than it should be. Further, Statistics method was also used to identify the explanatory ability that was calculated through Simple correlation coefficient of both Models. The most important findings of the study were that both Models were scientifically unable to determine stock prices as some of the predicted values were negative, which is unrealistic from the scientific and practical point of view. Furthermore, it was clear that Walter and )Lerner& Carleton) Models were invalid to be predicted statistically due to the weakness of the explanatory ability of both Models. It recommends to introduce an accounting Model based on accounting information directly to determine the stock prices in the Palestinian environment. It also highly recommends the necessity of testing the validity of the two models by applying them in exchanges and financial markets in other various environments.
Key words - Walter Model, Lerner & Carleton Model, Common stock prices, Intrinsic Value, Accounting information.