RSS FeedUpcoming EventsSEM 217: Sunil Wahal, Arizona State University, April 2https://events.berkeley.edu/econ/event/241060-sem-217-sunil-wahal-arizona-state-university

Abstract: We investigate the relation between inventive input (R&D), inventive output (the economic value of patents, EVP), firm-level profitability and asset growth, and stock returns. Current R&D and EVP forecast future profitability. Neither forecast future asset growth. Factor models motivated by q-theory and the dividend discount model fail to price R&D and EVP correctly, leaving large alphas on the table. But model failure is due to design specifics, not economic underpinnings: using cash-based operating profitability to measure expected profitability resurrects both models.

https://events.berkeley.edu/econ/event/241060-sem-217-sunil-wahal-arizona-state-university