Date of Award
Bachelor of Arts
An accurate predictive model of a firm’s future performance has been long sought after in the finance field. This study examines the relationship of a firm’s franchise value, using the Franchise Factor, to its Price-to-Earnings ratio as one model of performance. Using the firms in the S&P 1,500 as the data sample, this study also examines the effects of market value along with the franchise value to price-to-earnings ratio. The results show that the franchise value to price-to-earnings ratio, even when controlling for the firm’s market value, was in fact predictive of individual companies’ stock returns between 2000 and 2009.
Landrigan, Sean, "Stock Returns and the Franchise Value" (2012). Business/Business Administration. 15.