There are two general theories that exist about the source of the value premium.
Value stock indexes experience higher dividend growth than growth indexes and this contributed significantly to the value premium.
Other academics believe the value premium is derived from securities mispricing resulting from erroneous growth assumptions among investors.
The higher growth in dividends in value indices then creates the value premium.
Both talked about capturing a value premium as a means of boosting performance.
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Either way, as these mistakes are realized in the marketplace, both sides regress to the mean and this in turn creates the value premium.
The greater risk theory supposes that the value premium is due to unobserved risk within those securities, such as hidden financial distress or illiquidity in the marketplace.
Rebalancing and the Value Effect by Denis Chaves and Robert Arnott of Research Affiliates looked into how reconstitution and rebalancing within growth and value indexes contributed to the value premium.
Shares currently trade at 2.5x book value, a premium to the industry average of 2.0x.
The ViewPad E70 brings advanced technology to consumers with rich features and premium value, for an extremely portable and affordable mobile entertainment device.
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Also, keep in mind, 66.7 million consumers are insured by a company that provides the required value for their premium dollars, the government said.
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Because of the health care law, however, they can put these worries aside and know they are getting a better value for their premium dollars.
And cultural ideas that create value command a premium price.
Other mortgage REITs include American Capital Agency (AGNC) which is trading at a 22% premium to the third quarter book value and Chimera Investment Corporation (CIM) which is trading at a 23% premium to third quarter book value.
To put that in context, the median company in the Russell 3000 sells at a 28% premium to the value of its current EVA, and the median semiconductor company sells at a 47% premium.
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That is an estimated 2.5 times book value, a nice premium for a bank that has not published audited statements in four years.
Although CBS relies on advertising revenues to a great extent, the value contribution from its premium networks such as Showtime, Flix and The Movie Channel is quite meaningful.
Unlike with a futures investment, which is based on the current value of gold, the downside to options is that the investor must pay a premium to the underlying value of the gold to own the option.
Bunge itself consistently traded at a premium to book value before it took its big dive.
The increase in value will come from higher premium seating, sponsorship and advertising revenue.
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All this is reflected in the premium over book value before adjusting for goodwill on the balance sheet.
For regular shareholders Malone got a 36% premium over the value of TCI before the deal was announced.
Unlike Berkshire, Loews doesn't sell at a premium to book value, but Tisch's company boasts a strong balance sheet.
Of 2, 000 heads questioned, around a third said the premium equalled the value of cuts elsewhere in their budget.
We will assume that the bank trades at a modest premium to book value on the stock market, of 1.5x book.
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History has shown us that companies typically will raise capital when the stock price is at a double-digit premium to book value.
Presently, the premium over book value for the market is 1.5 times, a reasonable valuation, but in 1982 stocks sold down to book value.
Bear is more exposed than its peers to a slowdown in fixed-income markets but its shares are now trading at an invitingly small premium to book value.
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