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The Relationships Between Earnings Per Share(EPS), Book Value Per Share (BVPS) and Stock Prices Under Both Pre- and Post-FRS Reporting Regimes in Malaysia

Leong, Chee Hoong (2011) The Relationships Between Earnings Per Share(EPS), Book Value Per Share (BVPS) and Stock Prices Under Both Pre- and Post-FRS Reporting Regimes in Malaysia. Masters thesis, Universiti Utara Malaysia.

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Abstract

The project paper is to examine the relationships between earnings per share(EPS) and book value per share (BVPS) and stock market prices under both preand post-FRS reporting regimes. Value relevance to both EPS and BVPS were separately tested under both financial reporting mechanisms by the price-earnings model. This study finds that positive relationships between value relevance of earnings and both EPS and BVPS,however,is in declining when adopting newly mandated FRS system by Malaysian companies. Coefficient of BVPS is positively increasing over two reporting periods, whereas vice versa for EPS attributable to equity investors are more desirable to measure balance sheet than income statement items. In addition, distinct of value relevance of earnings appears in companies operate in different operation structures or business models because of their business activities deficiencies. Relationships between value relevance of earnings and EPS and BVPS are declining over three consecutive years since FRS reporting regime is adopted, from 2006-2008.The coefficient between EPS and stock market prices is consistently dropping over these three reporting periods, and inversely, coefficient between BVPS and value relevance of earnings is inclining. Thus, this present study concluded that FRS reporting regime is increasingly important in the determination for BVPS (representing balance sheet items) than EPS (representing income statement items) for the investment decision.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HG Finance
Divisions: Othman Yeop Abdullah Graduate School of Business
Depositing User: Mr. Badrulsaman Hamid
Date Deposited: 27 Feb 2013 06:31
Last Modified: 19 Apr 2016 01:30
URI: http://etd.uum.edu.my/id/eprint/3116

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