In Section 2, we develop the concept of residual income and present alternative measures used in practice.
In Section 3, we derive the residual income valuation model and illustrate its use in valuing common stock.
Section 4 addresses accounting and international issues in the use of residual income valuation.
In subsequent sections, we present practical applications of residual income models: Section 5 presents the single-stage (constant-growth) residual income model,
and Section 6 presents multistage residual income models.
We summarize the chapter in Section 7.