Post-Earnings Announcement Drift: The Role of Earnings Volatility
Ben Mhamed Yosra,
Jilani Fawzi
Issue:
Volume 3, Issue 3, May 2015
Pages:
35-41
Received:
10 March 2015
Accepted:
19 March 2015
Published:
28 March 2015
Abstract: The study reported here consisted of examining the market’s reactions to the volatility effect on time series correlations of earnings in a post-earnings announcement drift context. Sample in this study comprises of 295 Canadian firms and covers 2006-2011 period. Firstly, our results show that earnings volatility is inversely related to earnings persistence (under the AR(1) and the Foster model assumption). Secondly, our findings confirm the aggravated negative effect of earnings volatility on seasonal unexpected earnings persistence. Finally, following Mishkin’s (1983) method of testing market efficiency, this study supports that capital market recognizes the earnings volatility effect on earnings persistence. Our results contribute to understanding the role of earnings volatility in explaining the persistence of PEAD.
Abstract: The study reported here consisted of examining the market’s reactions to the volatility effect on time series correlations of earnings in a post-earnings announcement drift context. Sample in this study comprises of 295 Canadian firms and covers 2006-2011 period. Firstly, our results show that earnings volatility is inversely related to earnings pe...
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The Effect of Capital Structure on the Financial Performance of Listed Companies in Bahrain Bourse
Ahmad Mohammad Obeid Gharaibeh
Issue:
Volume 3, Issue 3, May 2015
Pages:
50-60
Received:
29 April 2015
Accepted:
9 May 2015
Published:
19 May 2015
Abstract: The study investigates the effect of capital structure on the financial performance of the 17 nonfinancial companies listed in the Bahrain Bourse. The investigation was performed using 5 years data for the period from 2009 to 2013. The impact of some key macroeconomic variables (gross domestic product growth and inflation rate) on the performance of the firm was also considered in this study. Multiple regressions represented by ordinary least squares (OLS) were used to examine the effect of the independent variables (capital structure, inflation rate and GDP growth) on the financial performance measures used (ROA, ROE, EPS, and Dividend Yield)). Capital structure is encapsulated by total liabilities to total assets (TLTOTA) and total equity to total assets (EQTOTA). The results indicate that capital structure, represented by total liability to total assets, has a significantly positive impact on the performance of the firm represented by ROE, but not by ROA, EPS, and DIYILD. The results also indicate that lagged performance measures of ROA, ROE, EPS, and DYIELD have a significantly positive influence on the current year’s performance measures of the firm. Moreover, the results indicate that lagged macroeconomic variables of inflation have a significantly negative relationship with certain performance measures (ROA, ROE, and EPS). Furthermore, the results indicate that gross domestic product growth (GDPG) has a significantly negative relationship with financial performance measured by EPS, but not those measured by ROA, ROE and DYIELD.
Abstract: The study investigates the effect of capital structure on the financial performance of the 17 nonfinancial companies listed in the Bahrain Bourse. The investigation was performed using 5 years data for the period from 2009 to 2013. The impact of some key macroeconomic variables (gross domestic product growth and inflation rate) on the performance o...
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