Shiller PE Ratio seems to fit well as a proxy to test the Market Tiiming Theory along with the Market-to-Book (M/B). Since the M/B measures the managers 'perception of the company in the market in isolation way, the Shiller PE Ratio measures the managers' perception of the general market.

The use of Shiller PE Ratio (Cyclically Adjusted Price to Earnings Ratio - CAPE) in papers on capitlal structure theory (trade-off, pecking order and market timing). Somebody knows?

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