A Comparison of EPS and EVA as Explanatory Variables for Share Price

J U de Villiers and Christo Auret

Studies in Economics and Econometrics, 1998, vol. 22, issue 2, 47-63

Abstract: This paper compares the explanatory power of earnings per share (EPS) and economic value added (EVA) in explaining share prices. We follow a procedure developed by Demsetz (1995) in which he estimates multiple linear regressions with share price as the dependent variable and contemporaneous EPS, leading EPS and lagged EPS as explanatory variables. We replicate this study using South African EPS data, and then repeat the calculations using South African EVA data as the explanatory variables. We find that EPS has more explanatory power than EVA in explaining share prices. The benefit of using EVA instead of EPS in share analysis is therefore not evident from our analysis.

Date: 1998
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/03796205.1998.12129124 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rseexx:v:22:y:1998:i:2:p:47-63

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rsee20

DOI: 10.1080/03796205.1998.12129124

Access Statistics for this article

Studies in Economics and Econometrics is currently edited by Willem Bester

More articles in Studies in Economics and Econometrics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().