A Fast and Parsimonious Way to Estimate the Implied Rate of Return on Equity

Sanna, Dario (2020): A Fast and Parsimonious Way to Estimate the Implied Rate of Return on Equity.

Abstract

I propose a fast and parsimonious way to estimate the implied rate of return on common equity of single stocks and indexes, resulting from the combination of two easily computable ratios.

• Item Type: MPRA Paper
• Language: English
• Keywords: Earnings Yield, Implied Cost of Equity, Price Earnings Ratio, Quadratic Roe Ratio, Roe Discount Model
• Subjects: G - Financial Economics > G1 - General Financial Markets > G12 - Asset Pricing ; Trading Volume ; Bond Interest Rates; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; G - Financial Economics > G3 - Corporate Finance and Governance > G35 - Payout Policy

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