EMPIRICAL TESTS AND IMPLEMENTATIONS
The RIM has inspired a large quantity of empirical research. Some of this work
compares the empirical properties of this model to dividend or cash fiow models. Other
studies reexamine the relation between stock returns and accounting earnings using a
valuation framework. Still others apply the model to various investment contexts. Finally,
several studies use the model to estimate an implied cost-of-capital. My discussions
cover a representative sampling of these recent studies.