Gaming the Float: How Managers Respond to EPS-based Incentives

Table 9: Short-term Accretive and Dilutive Effects
This table presents summary statistics on the accretive and dilutive effect of stock splits on quarter-end EPS. A split
is determined to be accretive if the firm’s EPS (measured as Compustat IBADJQ/CSHPRQ rounded to the penny)
is greater than the EPS had the firm not split (measured as IBADJQ/CSHPRQ*facshr, rounded to the penny, then
divided by the split factor). The split is dilutive if the post-split EPS is less than pre-split, and neither if there is no
difference. Atypical split ratios are defined as any split factor not in (1.25,1.33,1.5,1.75,2,2.5,3,4,5,10). A split is late
if it occurs after the quarter end but before the earnings report date. Accretive, neither, dilutive, atypical, and late
are all indicator variables.
Sample Means
all splits late=0 late=1 atypical=0 atypical=1
N 11447 11016 431 11148 299
accretive 0.318 0.319 0.309 0.315 0.431
neither 0.393 0.392 0.415 0.401 0.097
dilutive 0.290 0.290 0.276 0.285 0.472
atypical 0.026 0.026 0.030
late 0.037 0.043
late=0 late=1 late=0 late=1
atypical=0 atypical=0 atypical=1 atypical=1
N 10730 418 286 13
accretive 0.316 0.300 0.423 0.615
neither 0.400 0.426 0.098 0.077
dilutive 0.285 0.275 0.479 0.308
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