Market Hypothesis sense. The paper tries to show that this so-called excess volatility is to a large extend the result of the …, constant dividend growth rates as well as non-variable discount rates. It is shown that indeed volatility declines considerably … cashflow ; excess volatility ; variance bound test ; rational expectations …

depict this fact. In this paper we incorporate excess volatility into a simple DCF model by considering an autoregressive … (respectively dividend-price ratio) is stochastic and our model represents excess volatility. We discuss whether our assumptions are …