Optimization model of earnings persistence under fixed dividens payment ratio and empirical research.

With the help of Ohlson models which have strick mathematical relations between the intrinsic value of share prices and the accounting information, supposing that firms pay dividends under fixed atio, this paper optimizes the earnings persistence models developed by Kormendi and Lipe and gives out a new earnings persistence measures with more reasonable hypotheses. Empirical results of earnings esponse coefficients of 34 sample companies show that the new earnings persistence measures have more explainatory power than that of earnings persistence measures developed by Kormendi and Lipe. [ABSTRACT FROM AUTHOR]