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In our view, the most reliable estimate available is a total value of U.S. corporations
of 1.54 times GNP, or 17.5 times after-tax corporate earnings. This estimate is based on a
detailed study of 135 industrial corporations done by Laurence Sloan and Associates (1936)
at the Standard Statistics Company, a company that later merged with Poor’s Publishing
to become Standard and Poor’s (S&P). The estimate we will use, however, is a total value
of 1.67 times GNP (or 19 times after-tax corporate earnings). This estimate is based on the
price-earnings ratio of the S&P composite stock index. Because we are evaluating Fisher’s
claim that the stock market...
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Designed for High School Discovery Guide
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Designed for High School Discovery Guide
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