Asset Growth and the Cross-Section of Stock Returns

  title={Asset Growth and the Cross-Section of Stock Returns},
  author={Michael J Cooper and Huseyin Gulen and Michael J. Schill},
We test for firm-level asset investment effects in returns by examining the crosssectional relation between firm asset growth and subsequent stock returns. Asset growth rates are strong predictors of future abnormal returns. Asset growth retains its forecasting ability even on large capitalization stocks. When we compare asset growth rates with the previously documented determinants of the cross-section of returns (i.e., book-to-market ratios, firm capitalization, lagged returns, accruals, and… CONTINUE READING
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