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An Elasticity Approach to Equity Risk Evaluation

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Abstract

This study defines and derives a measure of risk for real estate investment decisions using the concept of elasticity. Specifically, the elasticity of the after-tax equity yield with respect to the before-tax net operating cash flow growth rate is derived from a discounted cash flow equity valuation model. Also, an illustration of the use and interpretation of this elasticity measure is provided.

Suggested Citation

  • Larry J. Johnson & James L. Kuhle & Carl H. Walther, 1987. "An Elasticity Approach to Equity Risk Evaluation," Journal of Real Estate Research, American Real Estate Society, vol. 2(1), pages 41-49.
  • Handle: RePEc:jre:issued:v:2:n:1:1987:p:41-49
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    References listed on IDEAS

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    1. A. Meltzer & Peter Ordeshook & Thomas Romer, 1983. "Introduction," Public Choice, Springer, vol. 41(1), pages 1-5, January.
    2. A. P. Thirlwall, 1983. "Introduction," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 5(3), pages 341-344, March.
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    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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