The Stock Market Valuation of Research and Development Expenditures
Abstract
We examine whether stock prices fully reflect the value of firms? intangible assets, focusing on research and development (R&D). Since intangible assets are not reported on financial statements under current U.S. accounting standards and R&D spending is expensed, the valuation problem may be especially challenging. Nonetheless we find that historically the stock returns of firms doing R&D on average matches the returns on firms with no R&D. For...
Paper Details
Title
The Stock Market Valuation of Research and Development Expenditures
Published Date
Jun 1, 1999
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