Fundamental determinants of the Australian price-earnings multiple

Shamsuddin, Abul and Hillier, John 2004, Fundamental determinants of the Australian price-earnings multiple, Pacific-basin finance journal, vol. 12, no. 5, pp. 565-576, doi: 10.1016/j.pacfin.2004.02.001.

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Title Fundamental determinants of the Australian price-earnings multiple
Author(s) Shamsuddin, Abul
Hillier, John
Journal name Pacific-basin finance journal
Volume number 12
Issue number 5
Start page 565
End page 576
Publisher Elsevier BV
Place of publication Amsterdam, The Netherlands
Publication date 2004-11
ISSN 0927-538X
Summary This paper is the first attempt to investigate the factors fundamental to the setting of the price–earnings (P–E) multiple for the Australian stock market. The quarterly P–E ratio for the ASX 200 index is used as a measure of the market wide P–E multiple. It is demonstrated that a large portion of the variation in the P–E multiple can be explained by the dividend payout ratio, interest rates and GDP growth rates. In addition, consumers' confidence—a leading indicator of future growth opportunities, the Australian–US exchange rate—a key determinant of the competitiveness of domestic companies, and volatility of domestic market returns—a risk factor, have incremental explanatory power.
Language eng
DOI 10.1016/j.pacfin.2004.02.001
Field of Research 150201 Finance
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2004, Elsevier B.V.
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Document type: Journal Article
Collections: Faculty of Business and Law
Deakin Business School
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