The Myth Of The Earnings Yield

The Myth Of The Earnings Yield A very slender minority of firms distribute dividends. This truism has revolutionary implications. In the absence of dividends, the foundation of most - if not all - of the financial theories we act on in order to determine the value of sh ares, is falsified.

These theories rely on a few implicit and explicit assumptions: (a) That the (fundamental) "value" of a share is closely correlated (or even equal to) its exploit (stock exchange or transaction) price (b) That price movements (and volatility) are generally random, though correlated to the (fundament al) "value" of the share (will always align to to that "value" in the long term) (c) That this fundamental "value" responds to and reflects invigorate information efficiently (old information is adequatey incorporated in it) Investors are supposed to discount the stream of all coming(prenominal) income from the share (using cardinal of a myriad of possible rate - all heatedly disputed)....If you want to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay