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Author:Easton, P. (et al.)
Title:Using forecasts of earnings to simultaneously estimate growth and the rate of return on equity investment
Journal:Journal of Accounting Research
2002 : JUN, VOL. 40:3, p. 657-676
Index terms:Earnings
Economic forecasting
Equity capital
Growth
Return on investment
Language:eng
Abstract:A method for simultaneously estimating the cost of equity capital and the growth of residual earnings that are implied by current stock prices, current book value of equity and short-term forecasts of accounting earnings is developed in this study. The use of the method is demonstrated by calculating the expected equity risk premium.
SCIMA record nr: 254666
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