Ricci, Roberto Ghiselli; Magni, Carlo Alberto - In: Quantitative Finance 14 (2014) 7, pp. 1257-1271
This paper presents an axiomatization of residual income, also known as excess profit, and illustrates how it can univocally give rise to fixed-income or variable-income assets. In the first part it is shown that, depending on the relations between excess profit and the investor's excess wealth,...