Estimating Systematic Risk With Long‐Term Growth Forecasts and Analyst Following

Abstract

According to the capital asset pricing model, a stock’s required rate of return is determined by systematic risk, otherwise known as beta. Usually betas are estimated using historic data. It is shown here that future betas have a stronger relationship to analysts’ long‐term growth forecast than to historic betas.

Citation

Dowen, R.J. (1992), "Estimating Systematic Risk With Long‐Term Growth Forecasts and Analyst Following", American Journal of Business, Vol. 7 No. 2, pp. 33-38. https://doi.org/10.1108/19355181199200014