Research Summary

Equity Valuation

by Charles C.Y. Wang


Professor Wang’s research utilizes valuation theory to explain how firm fundamentals are related to the expected rates of equity returns and their term structures. His research provides strong evidence that valuation-based proxies of expected returns outperform the standard empirical proxies motivated by finance theory. He has shown that such valuation-based proxies may not be perfect. To promote a better understanding of their imperfections, Professor Wang has developed a novel diagnostic procedure to estimate the associations between measurement errors of expected returns proxies and firm characteristics.