Residual income valuation

Residual income valuation (RIV), also called the residual income model or residual income method (RIM), is an approach to equity valuation that formally accounts for the cost of equity capital. Here, "residual" means in excess of any opportunity costs measured relative to the book value of shareholders' equity; residual income (RI), or economic profit, is then the income generated by a firm after accounting for the true cost of capital.

Source: Wikipedia — Residual income valuation (CC BY-SA 4.0)