The influence of earnings per share on capital issues: some evidence from UK companies

Ian Davidson and Chris Mallin

The European Journal of Finance, 1998, vol. 4, issue 3, 305-309

Abstract: This paper investigates the simple hypothesis that when companies issue more capital, they have a tendency to select the type of capital, all other things being equal, which results in the higher short-term earnings per share (eps). The methodology employs probit analysis to test the hypothesis that the form of issue selected was that which gave the higher eps after controlling for other factors such as leverage and industry classification. The results lead us to conclude that there is evidence in capital issues of functional fixation on eps.

Keywords: Earnings Per Share Functional Fixation Capital Issues (search for similar items in EconPapers)
Date: 1998
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DOI: 10.1080/135184798337326

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