Most of the theoretical work to date has assumed an infinite forecasting horizon.
This assumption is problematic because, in empirical implementations, the model involves
finite-period forecasts and the calculation of a "terminal value" at the end of the
forecast horizon. In an important link to the empirical literature. Penman (1997) provides
a general framework for imderstanding the pivotal role of the terminal value
calculation. This study pinpoints the essential differences between various finite-horizon
implementations of the eqviity valuation equation.