The incremental explanatory power of book value is
the total explanatory power of book value and residual
earnings less the explanatory power of residual earnings
alone.
The incremental explanatory power of residual earnings is
the total explanatory power of book value and residual
earnings less the explanatory power of book value alone.
The explanatory power common to book value and
residual earnings is the total explanatory power of book
value and residual earnings less the incremental explanatory
power of book value and the incremental explanatory
power of residual earnings.6