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- Title
Impact of Earnings per share on Market Value of an equity share: An Empirical study in Indian Capital Market.
- Authors
Pushpa Bhatt, Pushpa; Sumangala, J.K.
- Abstract
Equity valuation is a central question which the academicians and researchers in the field of Capital markets are trying to address through different angles. At the same time, the practitioners in the field of stock trading have been working through different clues. Use of accounting information for equity valuation is a field of research which has seen a lot of activities. In the recent past this field made seminal contribution with the publication of Ball and Brown (1968). A number of accounting variables have been used to explain equity value and equity return. Earning is an important variable affecting the market value of equity share. Once a successful company starts building up reserves it will also look for expanding its scale of operations and thus increase its earnings. Once a company starts earning attractive sum, the equity share will have more and more demand which will result in increase in market value of the equity. A lot of research in this area has taken place internationally especially with the data of USA. An attempt is made in this paper to study the impact of Earnings per share (EPS) on the market value of an equity share in the Indian context. The study is based on data of 50 companies over a period of 5 years. The 50 companies that have been selected are the first 50 companies in the list of India's most valuable companies as per the Business Today Survey of 2010. Based on our research, we conclude that EPS impacts the market value of an equity share in the Indian context.
- Publication
Journal of Finance, Accounting & Management, 2012, Vol 3, Issue 2, p1
- ISSN
2153-2818
- Publication type
Academic Journal