Ohlson (1995) develops an equity valuation model based on the framework of dividend irrelevance proposition proposed by Miller and Modigliani (1961). He claims that a dividend payout lowers the current book value of equity but not the current earnings, and thus a firm's current market value is not influenced by its dividend policy. This dividend irrelevance proposition was initially developed under some assumptions or conditions such as perfect market, no tax effects, and no stock issue and transaction costs. Apparently, these assumptions are questionable in reality because dividends are normally related to earnings and influenced by the market and tax factors, and thus they are likely to affect the stock price and the firm value. As a result, Ohlson's equity valuation model has been recently extended to studying the broader valuation issues related to interest rate, risk, and the relationship between earnings and share prices. In this paper, we develop three equity valuation models by extending Ohlson's model to consider the relationship between earnings and dividends and investigate the information content of dividends in firm valuation. Specifically, the major characteristics of these extended valuation models are: Model 1 considers dividends as a fraction of the permanent component of earnings, Model 2 considers dividends as a fraction of the present discounted value of future expected earnings, and Model 3 considers dividends as a proportion of the current earnings. We empirically test the explanatory power of these theoretical models by using the available data from the NYSE firms. Our results indicate that for all three extended models, book value of equity, liabilities, and investment are significantly and positively related to stock prices for the whole sample. This result provides empirical support that these three accounting fundamentals are important determinants of firm values. Furthermore, a comparison of the models' predictive abilities reveals that Model 2, considering dividends as proportional to the present discounted value of future expected earnings, performs better than the other two models not only for the whole sample but also for the manufacturing industry and the service industry sub-samples. Taken together, our findings provide further evidence that accounting numbers are important determinants of the firm value and dividends are closely related to the present discounted value of future earnings and the firm value.