This study provides empirical evidence on a comparison of two equity valuation models: the dividend discount model and the residual income model, of Thai firms during 1995-2004. DDM defines an intrinsic value of the equity as a combined present value of all expected future dividends while RIM defines an intrinsic value of the equity as the sum of book value and a combined present value of all expected future residual income where the residual income is defined as net income minus charges of equity capital invested. Our empirical evidence suggests that both DDM and RIM equity values are downwardly biased and the equity values with a component of the terminal value reduce the estimation bias.