Earnings Dilution and the Explanatory Power of Earnings for Returns
研究股票期权和可转换证券导致的盈利稀释如何削弱盈利与股票回报之间的关系，发现稀释性证券会显著降低盈利反应系数，尤其在股价上涨或盈利利好时更明显。
Executive stock options and convertible securities can increase the number of common shares outstanding while adding less than the market value of the newly issued securities to a firm's assets. We model the effect of expected dilution on the earnings/return relation. Expected dilution effectively reduces the permanence of an earnings innovation. Empirical evidence supports the hypothesis that dilutive securities attenuate the relation between earnings and returns. Estimated earnings response coefficients (ERCs) are significantly lower when there are shares reserved for conversion. The effect is more pronounced for firms that have experienced price increases or positive earnings news, as these increase the expected dilutive effect of conversions.