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Chi-Wei Su, Ya-Wen Chang, Yahn-Shir Chen and Hsu-Ling Chang
''The Relationship between Stock Price and EPS: Evidence Based on Taiwan Panel Data''
( 2008, Vol. 3 No.30 )
In this study, we use panel cointegration methods to investigate the relationship between stock prices and earnings-per-share (EPS). Furthermore, we consider whether stock prices respond to EPS under the different level of growth rate of operating revenue. The empirical result indicated that the cointegration relationship existed between stock prices and EPS in the long-run. Furthermore, we found that for the firm with a high level of growth rate, EPS has less power in explaining the stock prices however, for the firm with a low level of growth rate, EPS has a strong impact in stock prices.
Keywords: Earnings Response Coefficient (ERC)
Manuscript Received : May 23 2008 Manuscript Accepted : May 24 2008

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