Many corporate executives focus on earnings per share (EPS) and attempt to manage reported earnings in order to meet analysts’ expectations. Can managers succeed in protecting the stock price of their company by managing these accounts?
Answer to relevant QuestionsGive an example of how to boost reported quarterly earnings by using accruals, and describe the implications for reported earnings in the next quarter. What is the risk involved in using accruals to boost earnings? As a rule, cross-listings for companies with a home listing in a mature capital market do not offer material benefits. Discuss how and why this might be different for companies based in emerging capital markets. Discuss the key differences between the stock market downturn in 2001 and the one in 2008. Why could it be important for executives to understand the composition of their company’s shareholder base? Should a company operate a diversified portfolio of businesses? What are the arguments for and against?
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