The value of common stockholders' equity can be estimated as the present value of future abnormal earnings discounted at the cost of equity.

Name: The value of common stockholders' equity can be estimated as the present value of future abnormal earnings discounted at the cost of equity.
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This is known as the Residual Income Valuation model, which uses the present value of future abnormal earnings (earnings in excess of the required return on equity) to estimate the value of common stockholders' equity.

The Value of Common Stockholders' Equity Can Be Estimated as the Present