An Alternative Estimation Method of the
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Martti Luoma; Petri SahlstrΓΆm; Reijo Ruuhela
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Article
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2006
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Elsevier Science
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English
β 109 KB
This paper develops a method to estimate the equity risk premium. The method exploits the Earn Back Period (EBP) formula presented by Luoma and Ruuhela (2001), which is a generalization of the P/E ratio. The EBP has a clear theoretical interpretation and can be used to compare stocks with different