Managers should focus on issuing guidance on their likely EPS in the next quarter because it leads to higher valuations,lower share price volatility,and improved liquidity.

Question

Quizplus · Accepted Answer

Studies have found no evidence that issuing EPS guidance accomplishes these goals. Managers might better accomplish these goals by providing investors with a broad set of operational measures such as volume targets, revenue targets, and initiatives to reduce costs.

Managers Should Focus on Issuing Guidance on Their Likely EPS