The influence of earnings per share on capital issues: some evidence from UK companies

Ian Davidson, Christine Mallin

Research output: Contribution to journalArticlepeer-review


This paper investigates the simple hypothesis that when companies issue more capital, they have a tendency to select the type of capital, all other things being equal, which results in the higher short-term earnings per share (eps). The methodology employs probit analysis to test the hypothesis that the form of issue selected was that which gave the higher eps after controlling for other factors such as leverage and industry classification. The results lead us to conclude that there is evidence in capital issues of functional fixation on eps.
Original languageEnglish
Pages (from-to)305-309
Number of pages5
JournalThe European Journal of Finance
Issue number3
Publication statusPublished - 1998

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