P/E Movements: Some New Results
The P/E ratio is often used as a metric to compare individual stocks and the market as whole relative to historical valuations. We examine the factors that affect changes in the inverse of the P/E ratio (E/P) over time in the broad market (S&P500 Index). We use a limited number of variables that can be justified on theoretical grounds, and include variables that measure investor beliefs and changes in tax rates. We show that tax rates and investor optimism are important factors that affect the P/E ratio.
||P/E Movements: Some New Results
Social Science Research Network (Jan, 2004)
||Dudney, Donna; Jirasakuldech, Benjamas; Zorn, Thomas S
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|Dudney, Donna ||Office of the Dean
|Zorn, Thomas S||Finance