Earnings Yield

Since dividends to price(earnings to price)has power to forecast the market return,and a bond’s yield-to-maturity has power to predict future bond returns,the dividends to price(earnings to price)outyielded bond’s yield-to-maturity is risk premium.

红利收益率(盈利收益率)可以预测股市的未来收益率,而国债到期收益率可以预测未来债券的收益率,因此,红利收益率(盈利收益率)与债券到期收益率之差反映了股权风险溢价。