C6.12 The earnings-to-price ratio for theS&P500stocksdeclined significantly from the late 1970s to the late 1990s. As this
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C6.12 The earnings-to-price ratio for theS&P500stocksdeclined significantly from the late 1970s to the late 1990s. As this ratio is a "return" per dollar of price, some claimed thatthe decline indicated thatthe required returnfor equityinvesting had declined, andtheyattributed the increase in stockpricesoverthe periodto the decline in the required return. Whyis thisreasoning suspect?
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Related Book For 
Financial Statement Analysis And Security Valuation
ISBN: 9780071267809
4th International Edition
Authors: Penman-Stephen-H, Steven Penman
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