Economics, Econometrics and Finance
8 years ago

Emerging markets' stock returns predicted by market-to-book ratio.

Journal of global business and technology
PRICE-EARNINGS RATIO, DIVIDEND YIELD, AND MARKET-TO-BOOK RATIO TO PREDICT RETURN ON STOCK MARKET: EVIDENCE FROM THE EMERGING MARKETS
Güler Aras, Mustafa Kemal Yılmaz

Paper Summary

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The study looked at how price-earnings ratio, dividend yield, and market-to-book ratio can predict stock returns in emerging markets from 1997 to 2003. They found that market-to-book ratio was the most effective predictor, followed by dividend yield. The results suggest that some financial variables can help predict stock market behavior, but not all of them are equally useful.