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

Author

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  • Hafiz Imtiaz Ahmad
  • Pascal Alphonse
  • Michel Levasseur

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.

Suggested Citation

  • Hafiz Imtiaz Ahmad & Pascal Alphonse & Michel Levasseur, 2013. "Les effets de la croissance et de l'endettement sur les multiples de capitaux propres," ACCRA, Association francophone de comptabilité, vol. 19(1), pages 7-32.
    • Handle: RePEc:cai:accafc:cca_191_0007
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