Canadian stock market multiples and their predictive content Academic Article uri icon

  •  
  • Overview
  •  
  • Research
  •  
  • Identity
  •  
  • Additional Document Info
  •  
  • View All
  •  

abstract

  • A substantial variation in the Canadian E/P ratio can be explained by a combination of the lagged level of the E/P along with variability in logical explanatory factors. Moreover E/P ratios have a predictable component, both in the short-term and longer-term. On the other hand, short-term stock market returns are unpredictable. But, consistent with U.S. evidence, longer-term returns are predictable, especially when one conditions on the dividend yield.

publication date

  • January 1, 2008