Do Sales-Price and Debt-Equity Explain Stock Returns Better than Book-Market and Firm Size?

During the 1979-91 period, the sales-price ratio and the debt-equity ratio had greater explanatory power for stock returns than either the book-market value of equity ratio or the market value of equity. Furthermore, the sales-price ratio captures the role of the debt-equity ratio in explaining stoc...

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Bibliographic Details
Published in:Financial analysts journal 1996-03, Vol.52 (2), p.56-60
Main Authors: William C. Barbee, Jr, Sandip Mukherji, Raines, Gary A.
Format: Article
Language:English
Subjects:
Bias
Book value
Common stock
Debt
Debt to equity ratio
Earnings
Empirical evidence
Equity
Financial advisers
Financial data
Investments
Investors
Market value
Rates of return
Regression analysis
Size of enterprise
Stock prices
Stock returns
Stock sales
Stocks
Studies
Variables
Citations: Items that cite this one
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Summary:During the 1979-91 period, the sales-price ratio and the debt-equity ratio had greater explanatory power for stock returns than either the book-market value of equity ratio or the market value of equity. Furthermore, the sales-price ratio captures the role of the debt-equity ratio in explaining stock returns. Neither the book-market value of equity ratio nor the market value of equity has consistent explanatory power for stock returns, and the sales-price ratio is a more reliable explanatory factor.
ISSN:0015-198X
1938-3312
DOI:10.2469/faj.v52.n2.1980