This research paper investigates whether or not the Price-to-Book/ Return on Equity ratio is constant across the banking, retail, pharmaceutical and manufacturing sectors. The study makes use of statistical tests to determine if the ratio is constant. In addition, the research paper investigates the explicatory powers of the DuPont model, the Federal interest rate, and Consumer price inflation of the Price-to-Book/ Return on Equity ratio. This research documents evidence that the Price-to-Book/Return on Equity ratio is not constant across sectors and that the explicatory powers of the DuPont model differ from sector to sector. The implications of these findings are that investors cannot apply the same Price-to-Book/ Return on Equity ratio across sectors when evaluating stocks relative to each other.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uct/oai:localhost:11427/10321 |
| Date | January 2011 |
| Creators | Coultas, Andrew |
| Contributors | Gstraunthaler, Thomas |
| Publisher | University of Cape Town, Faculty of Commerce, Department of Finance and Tax |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Master Thesis, Masters, MCom |
| Format | application/pdf |
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