Paper Title :Does The Market Value Earnings of Firms That are Generated from Financial Leverage? The Case of The Health Care Industry
Author :Joseph Cheng, Alfred Lam, Ellie Gao
Article Citation :Joseph Cheng ,Alfred Lam ,Ellie Gao ,
(2017 ) " Does The Market Value Earnings of Firms That are Generated from Financial Leverage? The Case of The Health Care Industry " ,
International Journal of Management and Applied Science (IJMAS) ,
pp. 26-29,
Volume-3,Issue-9
Abstract : This paper sets forth a proposition that firms with debts be encouraged or required to disclose the unlevered EPS, which
is derived by purging out the portion of earnings contributed by financial leverage. This alternative measure of earnings, which is
referred here as zero leverage EPS or unlevered EPS, can provide a clearer focus on earnings which are purely performance related.
This paper describes a statistical study for the health care industry which shows that stock return bears a stronger correlation with
change in unlevered EPS than with the change in standard accounting EPS, thereby highlighting the merit of disclosing the
unlevered EPS to stakeholders as an additional information for a more precise evaluation of pure operating performance of the firm.
Type : Research paper
Published : Volume-3,Issue-9
DOIONLINE NO - IJMAS-IRAJ-DOIONLINE-9457
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Copyright: © Institute of Research and Journals
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Published on 2017-11-24 |
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