Access the full text.
Sign up today, get DeepDyve free for 14 days.
D Baucus, J Golec, J Cooper (1993)
Estimating risk–return relationships: an analysis of measuresStrateg Manag J, 14
HY Chen, MC Gupta, AC Lee, CF Lee (2013)
Sustainable growth rate, optimal growth rate, and optimal payout ratio: a joint optimization approachJ Bank Financ, 37
AC Lee, JC Lee, CF Lee (2009)
Financial analysis, planning and forecasting: theory and application
KJ Boudreaux, RW Long (1979)
The weighted average cost of capital as a cutoff rate: a further analysisFinanc Manag, 8
IE Brick, O Palmon, I Venezia (2012)
Bridging the GAAP: recent advances in finance and accounting
RC Higgins (1981)
Sustainable growth under inflationFinanc Manag, 10
RC Higgins (1977)
How much growth can a firm afford?Financ Manag, 6
RC Higgins (2008)
Analysis for financial management
DR Chambers, RS Harris, JJ Pringle (1982)
Treatment of financing mix in analyzing investment opportunitiesFinanc Manag, 11
CF Lee, MC Gupta, HY Chen, AC Lee (2011)
Optimal payout ratio under uncertainty and the flexibility hypothesis: theory and empirical evidenceJ Corp Financ, 17
CF Lee, JE Finnerty, AC Lee, J Lee, DH Wort (2012)
Security analysis, portfolio management, and financial derivatives
EF Fama, KR French (1992)
The cross-section of expected stock returnsJ Financ, 47
J Gordon, M Gordon (1997)
The finite horizon expected return modelFinanc Anal J, 53
CF Lee, JC Lee, AC Lee (2013)
Statistics for business and financial economics
M Gordon, E Shaprio (1956)
Capital equipment analysis: the required rate of profitManag Sci, 3
IE Brick, DG Weaver (1984)
A comparison of capital budgeting techniques in identifying profitable investmentsFinanc Manag, 13
IE Brick, DG Weaver (1997)
Calculating the cost of capital of an unlevered firm for use in project evaluationRev Quant Financ Account, 9
SA Ross, RW Westerfield, J Jaffe (2012)
Corporate finance
The growth rate plays an important role in determining a firm’s asset and equity values, nevertheless the basic assumptions of the growth rate estimation model are less well understood. In this paper, we demonstrate that the model makes strong assumptions regarding the financing mix of the firm. In addition, we discuss various methods to estimate firms’ growth rate, including arithmetic average method, geometric average method, compound-sum method, continuous regression method, discrete regression method, and inferred method. We demonstrate that the arithmetic average method is very sensitive to extreme observations, and the regression methods yield similar but somewhat smaller estimates of the growth rate compared to the compound-sum method. Interestingly, the ex-post forecast shows that arithmetic average method (compound-sum method) yields the best (worst) performance with respect to estimating firm’s future dividend growth rate. Firm characteristics, like size, book-to-market ratio, and systematic risk, have significant influence on the forecast errors of dividend and sales growth rate estimation.
Review of Quantitative Finance and Accounting – Springer Journals
Published: Mar 17, 2015
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.