Modeling Managers As EPS Maximizers


Event details

Date 02.10.2023
Hour 12:0013:00
Speaker Itzhak (Zahi) Ben-David, Ohio State University
UniL Campus, Room Extra 126
Category Conferences - Seminars
Event Language English

Textbook theory assumes that firm managers maximize the net present value of future cash flows. But when you ask them, the people running large public corporations say that they are maximizing something else entirely: earnings per share (EPS). Perhaps this is a mistake. No matter. We take managers at their word and show that EPS maximization provides a single unified explanation for a wide range of corporate policies such as leverage, share issuance and repurchases, M&A payment method, cash accumulation, and capital budgeting.