How Can We Measure Stock Market Returns? An International Co (2024)

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Abstract

The aim of our empirical work is to identify how we can measure stock returns. Stocks returns are approximated as the growth rate of market share price. We use two measures of stocks returns; return on assets, ROA, and return on equity, ROE. As a control variable, we use firm age. Our samples consists of 186 firms from United Kingdom and 186 firms from Ukraine studied over a period of 4 years from 2007 to 2010. To this end, we estimate three models. Using the data panels methodology, we conclude that return on equity approximates better socks returns for United kingdom and Ukraine. We could not however find evidence on a significant association between return on assets and stock returns.

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More about this item

Keywords

stock return; firm performance; return on assets; return on equity;
All these keywords.

JEL classification:

• R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
• Z0 - Other Special Topics - - General

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