| Summary: | 碩士 === 國立雲林科技大學 === 財務金融系碩士班 === 91 === Abstact
For stock investors, the main purpose of investing is gains of returns, and accounting information can help the investors to evaluate the company values reasonably and reduce risks of arbitrage to gain the excess returns. A company management can reflect on earnings and share price. The determinations of share price and earnings are reflections of many factors. Some of these factors are ability of earning profits; some are the bearing of financial risks and operating risks. Therefore, to invest an enterprise, we must consider profit ability and risks of the company.
Ohlson（1995）pointed out the equity value is the weighted averages of earnings and book value, Burgstahler and Dichev(1997) further found out that equity value can reflect the higher one of either the options value of net asset adaptation value or earnings recursion value. According to the statement above, my research take two hypothesis: One is the higher degree of financial leverage of a company, the less association of share price to earnings. The other is the higher degree of operating leverage of company, the less association of share price to earnings. My research is based on domestic stock market data using the cross sections big sample. We found the higher degree of financial leverage (DFL) and degree of operating leverage (DOL), the less association of equity value to earnings. That is, under different company risks, the association of earning to share value displays a reducing effect. The empirical results are the same as the hypothesis expected.
To sum up, theoretically there are positive correlation between accounting surplus and equity value. However my research added two company risk factors, and found out that this correlation is weakened if we increase the degrees of financial leverage (DFL) and degree of operating leverage (DOL).
|
|---|
