The competing asset argument listed above argues that only when stocks have the same earnings yield as nominal government bonds, that both asset classes are equally attractive to investors. But the earnings yield (E/P) of a stock does not describe what an investor actually receives as not all earnings are paid out to the investor (either via dividends or share buybacks). In addition, corporate bonds (with a yield above the government bond yield as a risk premium), do not fit into the Fed model of valuation, which therefore implicitly assumes that equities have the same risk profile as government bonds.