In contrast to the theory based propositions in Modigliani and Miller (1958; 1963) of a positive relationship between the cost of equity capital and financial leverage, claims of a negative empirical relationship between stock returns and leverage have been made in the article 'The Book-to-Price...

For a full text file please contact the corresponding author: Kenth Skogsvik (E-mail: kenth.skogsvik@hhs.se).

Using Swedish stock market data, this study investigates whether an investment strategy based on publicly available accounting information can generate abnormal investment returns. The strategy involves two steps. First, an accounting-based probabilistic prediction model of changes in the...

Using Swedish data, the study investigates whether an investment strategy based on publicly available financial statement information can generate abnormal investment returns. The strategy involves two steps. First, a financial statement based prediction model of changes in the book return on...