Effects of Dividend Ratios and Other Fundamentals on Forward P/Es - Some Evidences from a Worldwide Cross-Sectional Multivariate Analysis

Posted: 12 Nov 2012

Date Written: November 12, 2012

Abstract

This study seeks to regress the forward P/Es on firms’ fundamentals as measured on global market basis. Starting from theoretical premises (DDM), the paper develops a linear multivariate model in order to capture (for US, Australia / New Zeland / Canada, Europe, Japan and Emerging Markets quoted companies) the underlying value-drivers. The regression is cross-sectional with annual data referred to 2010, a financial year – immediately after the explosion of the GFC – which exhibits signals of both slight recovery and persisting uncertainty. Results about the dividend yield confirm the hypotheses whilst the association with payouts appears surprisingly negative. Other control financial variables are tested.

Keywords: price/earnings, dividend yields, dividend payouts, fundamentals, crisis

JEL Classification: G30, G35, M41

Suggested Citation

Taliento, Marco, Effects of Dividend Ratios and Other Fundamentals on Forward P/Es - Some Evidences from a Worldwide Cross-Sectional Multivariate Analysis (November 12, 2012). Proceedings of 19th International Business Research Conference 2012, Available at SSRN: https://ssrn.com/abstract=2174331 or http://dx.doi.org/10.2139/ssrn.2174331

Marco Taliento (Contact Author)

University of Foggia ( email )

Largo Papa Giovanni Paolo
Foggia, 71100
Italy

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