Purpose – The purpose of the paper is to investigate the relation between the value/growth anomaly and the external financing anomaly by considering an expanded value/growth indicator: free cash flow yield (free cash flows scaled by price). Design/methodology/approach – The paper utilizes...

Purpose – The purpose of this paper is to examine the informational content of retained and distributed earnings for future profitability and stock returns. Design/methodology/approach – The paper utilizes firm‐level cross‐sectional persistent regressions, Mishkin's econometric framework...