The level of firm investment, along with firm profitability, has been shown to be empirically powerful asset pricing … French (2014a), both rely on factors capturing the interrelationship of firm investment and profitability. The models … explanatory power when compared to firm size and investment. We interpret these results as evidence that the investment-profitability …

) Intertemporal CAPM (ICAPM) framework. Factors associated with alternative profitability measures forecast the equity premium in a … market volatility, thus being consistent with their positive prices of risk. The investment-based factors are also strong … with state variables that are more correlated with future investment opportunities or economic activity. Moreover, these …

equilibrium, affiliates might over-invest and the bunching-related investment effects generate a tendency for too high profit … profit. Setting up a model that allows for profitable and loss-making affiliates of multinationals, we show that profit …-tax country induces bunching. Such bunching promotes investment incentives in the low-tax as well as the high-tax country. In …

I investigate the profitability and investment premium in stock returns using hand-collected data from Moody's Manuals … for 1940-1963. Controlling for value, the profitability premium emerges as important in this period. In contrast, there no … reliable relation between investment and returns, regardless of whether investment is measured using growth in total assets or …