The Usefulness of Industry Segment Information
Posted: 28 Aug 2000 Last revised: 22 May 2014
Date Written: April 1, 2000
This paper identifies segment characteristics that made industry segment reporting more useful in equity valuation. Those characteristics are the difference in segments' growth potential, the relative size of segments, and the magnitude of correlation in segment earnings. Usefulness is measured by examining the percentage increase in R2 and the incremental coefficient of earnings in regressions of stock returns on disaggregate segment earnings relative to aggregate earnings.
JEL Classification: M41, M44, G12
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