Abstract
The paper examines the relationship between selected company characteristics and common stock returns. The empirical results suggest that there is a strong size effect in the Indian stock market using both market-based as well as non-market based measures of company size. We also detect a weak value effect on stock returns, especially when E/P ratio is employed as a relative distress proxy. The study further finds that the present stock classification system in India fails to differentiate in returns on different categories of stocks. We recommend an alternative stock classification system based on company size and relative distress. The proposed classification procedure will provide better insights to investors about the risk-return characteristics of common stocks.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
