Abstract:Predicting stock returns has been instrumental in our understanding of capital market structure. The validity of models, like the Capital Asset Pricing Model or the Gordon Growth Model, has influenced and contributed to building mathematical representations in predicting required return. Several studies attempted to explore different variables to determine the explanatory power of proxies in predicting stock return. For example, it is reported that dividends can explain up to 25% of the variance in returns. Th… Show more
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