Fundamentals explain less of the variation in TRS than in market-valueto- book-value or market-value-to-earnings ratios (as measured by the R2 shown in Exhibits 15.7 and 15.10). This holds true even when TRS is measured over 10-year periods. Why is TRS less clearly linked to fundamentals?
Answer to relevant QuestionsMany corporate executives focus on earnings per share (EPS) and attempt to manage reported earnings in order to meet analysts’ expectations. Can managers succeed in protecting the stock price of their company by managing ...Explain how changing from last-in first-out (LIFO) to first-in first-out (FIFO) might lead to a change in a company’s intrinsic value in some countries but not in others. Why is it much more risky to take a short position in a stock than a long position? What does that mean for the likelihood of over- versus undervaluation of a company’s share price? Consider two companies that are identical except for their shareholder base. One company’s shareholders comprise mostly noise traders, with mechanical investors making up the remainder. The other’s shareholders are ...What are the steps involved in constructing a portfolio? Discuss potential hurdles in executing the analytic approach.
Post your question