Informativeness of Accounting Information to Shareholders in Egypt: Perspectives from the Most Actively Trading Firms

Abstract

This study examines the informativeness of accounting information to three classes of shareholder value; high, medium and low. The results indicate that shareholder value adjusts positively a target level according to the five categories of financial ratios. This shows a high degree of informativeness of accounting information to shareholders in Egypt. In general, the results show that shareholders in the three classes are quite affected by the firms’ assets efficiency and profitability. In addition, shareholders do not appreciate liquidity and cost elements. Shareholders in the low class in particular do not appreciate the benefits of costless financing and prefer short term debt over long-term debt financing.