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The Present Value Relation Over Six Centuries

Author

Listed:
  • William N. Goetzmann

    (TBS - Toulouse Business School)

  • David Le Bris

    (Yale School of Management - Yale University [New Haven])

  • Sébastien Pouget

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, TSM - Toulouse School of Management Research - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - CNRS - Centre National de la Recherche Scientifique - TSM - Toulouse School of Management - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse)

Abstract

We study asset pricing over the longue durée using share prices and net dividends from the Bazacle company of Toulouse, the earliest documented shareholding corpo- ration. The data extend from the firm's foundation in 1372 to its nationalization in 1946. We find an average dividend yield of 5% per annum and near-zero long-term, real capital appreciation. Stationary dividends and stock prices enable us to directly study how prices relate to expected cash flows, without relying on a rate of return transformation. A reduced-form asset pricing model with persistent dividends and a time-varying risk correction is not rejected by the data.

Suggested Citation

  • William N. Goetzmann & David Le Bris & Sébastien Pouget, 2026. "The Present Value Relation Over Six Centuries," Working Papers hal-05495524, HAL.
    • Handle: RePEc:hal:wpaper:hal-05495524
    Note: View the original document on HAL open archive server: https://hal.science/hal-05495524v1
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