If Vt4 provides a good approximation of firm value, then we should be able to explain a large fraction of the variation in stock prices with the variables on the right-hand side of expression (3). This suggests the folowing regression:
If Vt4 provides a good approximation of firm value, then we should be able to explain a large fraction of the variation in stock prices with the variables on the right-hand side of expression (3). This suggests the folowing regression: