Chapter 8 Earnings Stock valuation based on earnings There is a continual controversy in the investment community concerns the relevance of dividends versus earnings as the underlying source of value of a common stock. Earnings, dividends, and investment ° Issuing stock Repurchasing stock The dividends decision Earnings determine market valueChapter 8 Earnings • Stock valuation based on earnings There is a continual controversy in the investment community concerns the relevance of dividends versus earnings as the underlying source of value of a common stock. – Earnings, dividends, and investment • Issuing stock • Repurchasing stock • The dividends decision – Earnings determine market value