Empirical Research on Information Content of Basic and Diluted Earnings Per Share
|Keywords||Basic earnings per share Diluted earnings per share Information content Event study Price model|
In recent years, with the continuous development of China's securities market, convertible bonds, stock options, warrants emerging. SFC also continue to develop relevant documents will be convertible bonds, stock options, warrants issued increasingly legalized and standardized. For the international convergence of accounting standards, as well as to the type of dilutive securities included in the calculation of diluted earnings per share index so that the calculation of the earnings per share index presentation and disclosure of more scientific and reasonable, China's Ministry of Finance in 2006 a new system of accounting standards issued in February, the introduction of \Earnings per share accounting standards requirements in the income statement net profit based separately presented basic earnings per share and diluted earnings per share indicators and the calculation of basic earnings per share and diluted earnings per share disclosed in the notes to the financial statements net income and the weighted average ordinary shares its calculation. Since then, some of the scholars from the perspective of the normative research, the basic earnings per share and diluted earnings per share calculation and disclosure, but for the implementation of the new accounting standards, Accounting Earnings - basic earnings per share and Diluted earnings per share information content and related outcomes. Based on the above considerations, China's A-share listed companies as samples, through empirical methods to test the Accounting Earnings - basic earnings per share and diluted earnings per share of differences in information content. In the course of the study, described the purpose and significance of this study, clear ideas and research framework of this study. Secondly, elaborated on the theoretical basis of the relationship between accounting earnings information and stock price as well as the theory of efficient markets hypothesis, and defines the meaning of the information content, also elaborated on the significance of the study accounting earnings information content. Third, the domestic and international accounting earnings and earnings per share index Information Content of a brief review of the relevant point of view classification and comparison and summary and evaluation. Fourth, clearly defined definition of basic earnings per share and diluted earnings per share and the amount of information contained in the earnings per share indicators and diluted earnings per share indicators were analyzed theoretically. Fifth, based on the theoretical basis and a review of relevant literature, the research hypothesis and describes the sample selection and data sources, as well as the construction of the model, then the model regression analysis, the conclusion that the empirical results. The results show that, listed companies disclosed in the annual report indicators of basic earnings per share and diluted earnings per share index has a price-related information content, and diluted earnings per share indicators with indicators of basic earnings per share of incremental information. This shows that the diluted earnings per share indexes provide investors with more useful information.