EXAMINING THE ROLE OF EARNINGS PER SHARE,BOOK VALUE OF EQUITY AND ABNORMAL EARNINGSON INVESTMENT DECISIONS

Abstract

The examined the role of book value of equity, abnormal earnings and earnings per share on investment decision of listed deposit money banks in Nigeria was evaluated. The study extracted secondary data from the annual financial statement from period 2015 to 2024. The data of the study was analysed using regression analysis. The study explanatory variables are earnings per Share, book value per share and abnormal earnings, the study considered firm size and firm financial leverage as the control variables. The empirical results revealed that book value per share has a strong, positive and significant effect on firm value, indicating that investors place substantial emphasis on the net asset position of banks when making investment decisions. The findings of the study indicate both earnings per Share and abnormal earnings indicate a positive insignificant relationship. The study concludes that financial statements are decision-useful for investment appraisal in Nigeria, but investors rely more heavily on balance sheet indicators particularly book value than on earnings measures. The study suggests that investors place greater emphasis on book value per share when assessing bank stocks, encourages bank managers to improve transparency regarding equity positions, and urges regulators to reinforce disclosure standards to enhance the reliability and relevance of financial reporting.