Yet more on a stochastic economic model: Supplement to Part 4: A model for share earnings, dividends and prices

Wilkie A. D., Sahin S.

ANNALS OF ACTUARIAL SCIENCE, vol.14, no.1, pp.138-149, 2020 (ESCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 14 Issue: 1
  • Publication Date: 2020
  • Doi Number: 10.1017/s1748499519000095
  • Journal Name: ANNALS OF ACTUARIAL SCIENCE
  • Journal Indexes: Emerging Sources Citation Index (ESCI), Scopus, ABI/INFORM, EconLit
  • Page Numbers: pp.138-149
  • Hacettepe University Affiliated: Yes

Abstract

In this paper, we revisit the Earnings, Cover (the ratio of earnings over dividends) and Price/Earnings (P/E) Ratio models which we introduced in Part 4 of this series. Although we suggested that the significant decline in the Earnings Index over 2015-2016 might be followed by dividends and share prices, this has not happened. Instead, Earnings have risen substantially over the years 2016 to 2018. Therefore, we revise our models based on the updated data and compare the new set of models with the one in Part 4 as well as with themselves. We then compare different methods for forecasting Dividends and Share Prices.