The Diversification Discount: Cash Flows vs. Returns / Owen Lamont, Christopher Polk.

Format:

Book

Author/Creator:

Lamont, Owen.

Contributor:

National Bureau of Economic Research.

Polk, Christopher.

Series:

Working Paper Series (National Bureau of Economic Research) no. w7396.

NBER working paper series no. w7396

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Diversification Discount

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1999.

Summary:

Diversified firms have different values than comparable portfolios of single-segment firms. These value differences must be due to differences in either future cash flows or future returns. Expected security returns on diversified firms vary systematically with relative value. Discount firms have significantly higher subsequent returns than premium firms. Slightly more than half of the cross-sectional variation in excess values is due to variation in expected future cash flows, with the remainder due to variation in expected future returns and to covariation between cash flow and returns.

Notes:

Print version record

October 1999.