The negative relationship between market P/E ratios and government bond yields seems to have become conventional wisdom among practitioners. Both (limited) empirical evidence and a (misleading) suggestion that the model originated in the Fed are used to support the model's plausibility. The...

The relative benefits of country diversification and industry diversification are critical for investors, portfolio managers, and investment banks. The unification of Europe has had a substantial impact on these relative benefits and the ultimate goal of this article is to evaluate their...

Should investors in emerging markets focus on diversifying across countries or diversifying across industries? This question, widely debated in developed markets, and particularly in Europe, has received little attention in emerging markets. Using a normative approach that disentangles the...

Should investors in emerging markets focus on diversifying across countries or diversifying across industries? This question, widely debated in developed markets, and particularly in Europe, has received little attention in emerging markets. Using a normative approach that disentangles the...

The most widely-used measure of an asset's risk, beta, stems from an equilibrium in which investors display mean-variance behavior. This criterion assumes that portfolio risk is measured by the variance (or standard deviation) of returns. However, the semivariance is a more plausible measure of...

SUBJECT AREAS: valuation, investment analysis, portfolio management, country analysis, emerging markets, development economics.This paper gives an overview of research and practice issues in the valuation of assets in emerging markets. It introduces a special edition in Emerging Markets Review...

SUBJECT AREAS: Stock pricing; Dividend-discount model; P/E ratiosThe case aims to introduce students to the issue of firm valuation by applying both the dividend discount model and multiples. Valuation using the discounted cash flows (DCF) model is typically addressed later in the course (after...

SUBJECT AREAS: Valuation in emerging markets; Cost of equity in emerging marketsThe case aims to introduce MBAs and executives to the issue of valuation in emerging markets. It stresses the differences between estimating the expected cash flows and cost of capital of companies in developed...

The case portrays the situation of Telefonica, Spain's largest company, on November, 1998, at the time it has to decide the dividend for the year. The situation is particularly interesting given that Telefonica was on the one hand generating large profits, but on the other it was under intense...

Subject Areas: Econometrics. Statistics. Software.Situation:This is a technical note to be used as background material for student use of the Shazam software. Shazam is a very powerful package for statistics and econometrics that occupies only four megabytes of disk space. In addition to the...