(Solved):Is there a difference in the equation for the modified Jones model, when it is employed using…

 

Question

Is there a difference in the equation for the modified Jones model, when it is employed using cross-section versus time-series and vise-versa?

 

EXPERT ANSWER

Yes, there is a difference in the equation for the modified Jones model, when it is employed using cross-section versus time-series and vise-versa.

Explanation: When the equation for the modified Jones model for time series then it considers the normal, non-discretionary accruals of firm, revenues, lagged assets of

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