Les effets de la croissance et de l'endettement sur les multiples de capitaux propres

Hafiz Imtiaz Ahmad, Pascal Alphonse and Michel Levasseur

ACCRA, 2013, vol. 19, issue 1, 7-32

Abstract: The study investigates the extent to which growth and leverage affect the association between earnings, book value of equity and market value of equity. To this end, a residual income model is developed and tested on a sample of US companies over the period 1997-2007. The results support the model predictions and indicate that growth has a positive impact on the association between market value and book value of equity for low leverage firms. The effect of high leverage on the association between market value and book value of equity is negative, irrespective of growth. As a consequence, one should take care of growth and leverage when selecting comparable firms in equity valuation using accounting-based multiples.

Keywords: multiples; association; studies; residual income; book value; market value (search for similar items in EconPapers)
Date: 2013
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Working Paper: Les effets de la croissance et de l'endettement sur les multiples de capitaux propres (2013)
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