Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)


Testing the effect of the earnings on the share price on the bahrain stock exchange

Author(s): Abdelrhman Ahmad Meero

The purpose of this paper is to evaluate the relationship between EPS and common stock performance for the listed companies in Bahrain Bourse (Stock Exchange) (BSE). The sample of the research is composed of the majority of the listed companies in BSE. The research model is designed based on the work of Easton & Harris (1991). The regression analysis has been used to test the three models (A, B, C) of the research. Model (A) testing the linkage between the stock performance and the value of the Earnings Per Share (EPS). Model (B) is employed to test the relationship between the change of Earnings Per Share (EPS) and the stock performance. Model (C) combines the models (A and B) to test the relationship between the EPS, Change in EPS and the stock performance. The data is collected from the published annual financial reports for the period 2011-2019. The result of the analysis showed a non-significant relationship between EPS and stock performance for the three models. This result implies the irrelevance of EPS (earnings per share) in explaining the changes in the share price of the listed companies in BSE.

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