The relation expressed in equation (6) is not new; it can be found in Preinreich (1938), and Edwards and Bell (1961).7ln fact, it was used in a crude form by the Internal Revenue Service (IRS) as early as 1920 to esti mate the impact of prohibition on the value of breweries.f Nevertheless, the direct link between future accounting numbers and current value seems to have been lost on the capital markets literature of the last 25