Becchetti, Leonardo; Giacomo, Stefania Di - In: The European Journal of Finance 13 (2007) 3, pp. 195-226
A 'two-stage growth' discounted cash flow (DCF) model is built to test whether changes in the underlying market fundamentals help to explain movements in stock prices. Empirical results on two samples of US and EU stocks show that the 'fundamental' earning price ratio (E/P) explains a...