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Determinants Of Earnings‐Price Ratios: A Reexamination

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  • Jang Youn Cho

Abstract

This paper incorporates recent equity valuation theories into the examination of determinants of earnings‐price (E/P) ratios to explain cross‐sectional differences in E/P ratios. The results show that ex ante measures of risk and growth as well as the payout ratio are the main determinants of E/P ratios. The persistence measure is not significantly related to E/P ratios. The results are robust to ordinary least square models as well as to a tobit censored regression.

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  • Jang Youn Cho, 1994. "Determinants Of Earnings‐Price Ratios: A Reexamination," Review of Financial Economics, John Wiley & Sons, vol. 3(2), pages 105-120, March.
    • Handle: RePEc:wly:revfec:v:3:y:1994:i:2:p:105-120
    DOI: 10.1002/j.1873-5924.1994.tb00575.x
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