As prominent labels, value stock and growth stock can be considered as crucial dimensions of finance. These are considered in order to make investment in accordance with styles to purchase businesses that have high multiples or growth stock, in comparison with low multiples or value stock. This is the case even if there can be reference of these labels in purchasing at higher price in comparison with low price. A number of events from the past have highlighted that value holds the tendency for outperformance of growth averagely. However, when considering the risks involved, the position held by value may turn out to negatively affect the investor. Nevertheless,, as identified since the last decade, the events related to value stocks can be considered as sobering. Apart from the huge prominence perceived by the styles, there is a lack of clarity regarding the purchases decision when purchasing value stock or growth stock. In this particular sense, labels may not be specifically illuminated. In the specific sense, the one making investment in value depicts the anxiousness of being trapped in perceiving value. Book value Price (B/P) and Earning Price (E/P) can be identified as the figures of accounting.
Hence, when considering the value of price, E/P and B/P are crucial phenomena in terms of accountancy. These ratios can be calculated from the principles of accountancy for the determination of how to measure earning price and book value price. From the same perspective, if B/P has some link with risk, it is due to the involvement of principles related to accountancy. A company having growth stock can be considered for consistency of growth in order to invest projects that provide benefits in generating the growth. From this perspective, a growth stock may be identified as the stock with the underlying scope to earn higher level of return with the involvement of similar risk related profile. In order to consider the factor regarding feasibility, an organization may be forced to be a company of growth stock, but there will be more value of the stock if the trade is beyond the peers with the involvement of similar risk. Genuine efforts have been put in by several researchers such as Zhang (2011) and Zhao (2008) in order to explain the concept of value premium.