SIRRIPA: The Stock-Tailored Yield to Maturity (YTM) and the Emergence of a Cross-Asset Valuation Metric

Abstract

This paper introduces the total Stock Internal Rate of Return Including Price Appreciation (SIRRIPA), a new, comprehensive metric for 
equity valuation derived from the Potential Payback Period (PPP) methodology. SIRRIPA consolidates the present value of future earnings and capital appreciation into a single, annualized return figure. Conceptually and mathematically, SIRRIPA plays for equities the same role that Yield to Maturity (YTM) plays for bonds. While YTM discounts future coupon payments and face value to equate them with the bond's current price, SIRRIPA applies the same principle to Earnings Per Share (EPS) and an expected exit price. This unified return metric represents a groundbreaking cross-asset tool, enabling direct and consistent comparisons between stocks and bonds and supporting more coherent portfolio strategies and efficient capital allocation.