SIRRIPA: A Groundbreaking Return Metric to Value Stocks Like Bonds

SIRRIPA: Une mesure révolutionnaire de rendement pour évaluer les actions comme des obligations

Rainsy Sam ()
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Rainsy Sam: International Management School Geneva (IMSG)

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Abstract: Traditional equity valuation tools—such as the P/E ratio, PEG ratio, Dividend Yield, and DCF models—struggle to integrate time, growth, and risk into a unified return framework. In contrast, bond markets rely on yield-based metrics like Yield to Maturity (YTM), which express return in fully time-adjusted, risk-sensitive terms. This paper introduces the Stock Internal Rate of Return Including Price Appreciation (SIRRIPA), a yield-based metric that applies the same logic to equity valuation. Derived from the Potential Payback Period (PPP), SIRRIPA measures a stock's total expected return by combining discounted earnings and terminal value within a coherent, finite-horizon framework. By interpreting EPS as equivalent to bond coupons and the Exit Price as a redemption value, SIRRIPA aligns equity valuation with fixed-income standards—enabling direct cross-asset comparison. The paper presents SIRRIPA's mathematical foundations, theoretical rationale, and practical implications, offering a modern, yield-centered approach to stock valuation.

Keywords: Yield to Maturity; Terminal Value; Earnings Yield; Cross-Asset Comparison; Stock Risk Premium; Risk-Free Rate; Discounted Cash Flow; Gordon-Shapiro Model; P/E Ratio; Internal Rate of Return; Potential Payback Period (PPP); SIRRIPA; Equity Valuation; Equity Valuation SIRRIPA Potential Payback Period (PPP) Internal Rate of Return Yield to Maturity P/E Ratio Gordon-Shapiro Model Discounted Cash Flow Risk-Free Rate Stock Risk Premium Cross-Asset Comparison Earnings Yield Terminal Value (search for similar items in EconPapers)
Date: 2025-07-27
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-05188563

DOI: 10.5281/zenodo.16285324

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