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- Title
The Predictive Ability of Dividend and Earnings Yields for Long-Term Stock Returns.
- Authors
Chunchi Wu; Xu-Ming Wang
- Abstract
We use empirical models to examine the predictive ability of dividend and earnings yields for long-term stock returns. Results show that dividend and earnings yields share a similar predictive power for future stock returns and growth. We find that the predictive power of dividend yields increases with the return horizon, but that yields forecast future returns and growth over a much longer horizon. Finally, dividend and earnings yields exhibit high autocorrelation and strong contemporaneous relations.
- Subjects
DIVIDENDS; STOCKS (Finance); DIVIDEND yield
- Publication
Financial Review, 2000, Vol 35, Issue 2, p97
- ISSN
0732-8516
- Publication type
Article
- DOI
10.1111/j.1540-6288.2000.tb01416.x