Property and liability stockholder yields and accounting profits |
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Authors: | Saul W Adelman James S Trieschmann Jack E Nicholson |
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Institution: | University of Georgia, USA |
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Abstract: | The market rate of return and related risk of a group of 23 property-liability insurers are explored. The focus is on the return earned by the stockholders of these firms. Previous studies have only examined the accounting rate of return. This study compares the accounting rate of returns to stockholder yields. Several factors that effect the return earned by shareholders are reviewed.The average return on the property-liability stocks studies was 4.0 percentage points greater than the accounting rate of return (0.14 vs 0.10). This evidence suggests that studies based only on accounting rates of return under-estimate returns earned by property-liability shareholders. On a risk-return basis property-liability profits were found not to be significantly different from the general stock market. However, several individual firms had superior stockholder yields. The beta for the group of firms was 1.09. |
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Keywords: | Address correspondence to: James S Trieschmann College of Business Administration University of Georgia Athens GA 30602 USA |
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