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Sources of Variability in EPS, dividends per share

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Identify factors affecting variability in earnings per share, dividends per share and market price per share that derive from (a) the company and (b) the economy.

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Response discusses the sources of Variability in EPS, dividends per share & market price per share

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Identify factors affecting variability in earnings per share, dividends per share and market price per share that derive from (a) the company and (b) the economy.

Risk causes variability in earnings per share, dividends per share and henceforth market price. Here risk means probability of having losses. The future is uncertain and full of risks. Longer the period of project, greater may be the risk and uncertainty. Following factors can cause risk:

1) Economic Risk/Market risk/Systematic risk
Systematic Risk means the risk inherent to the entire market or entire market segment. This is also known as "un-diversifiable risk" or "market risk." Hence systematic risk represents the uncertainty related to overall market. These are also economic risks. For example the world economy is affected now by recession and contraction ...

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