Prior research has shown that firms who generate earnings growth by improving profitability create value for shareholders, while firms who generate earnings growth through investment destroy value. This paper examines whether compensation committees take this into account while determining CEO...

The accruals anomaly, demonstrated by Sloan (1996), generated significant excess returns consistently for over four decades until 2002, but has apparently weakened in the subsequent period. In this paper, I argue that one factor responsible for this decline is the increasing incidence of...

The computation of implied cost of capital (ICC) is constrained by the lack of analyst forecasts for half of all firms. Hou, van Dijk, and Zhang (2012, HVZ) present a cross-sectional model to generate forecasts in order to compute ICC. However, the forecasts from the HVZ model perform worse than...

Using cross-sectional forecasts, we combine fundamental analysis strategies based on quality, such as the FSCORE from Piotroski (2000) and the GSCORE from Mohanram (2005), with strategies based on value, such as the V/P ratio from Frankel and Lee (1998) and the PEG ratio. While all four...

Prior studies document the role social media information plays in the stock market as well as the important dissimilarities between the bond and stock markets. Bridging these two literatures, we examine the role of social media information in the corporate bond market. Analyzing a broad sample...

Prior research examines how companies exploit Twitter in communicating with investors, how information in tweets by individuals may be used to predict the stock market as a whole, and how Twitter activity relates to earnings response coefficients (the beta from the returns/earnings regression)....

Does the placement of a line item in the income statement matters to investors? The passage of SFAS No. 145 affords a quasi-experimental setting to answer this question, because pre-SFAS No. 145, gains/losses from early debt extinguishments were reported below the line, while post-SFAS No. 145,...

Stock-based compensation (SBC) reduces the value of shareholder equity, ceteris paribus, and is a significant and growing expense for many firms. Despite its valuation implications and its growing importance, anecdotal evidence suggests that market participants ignore SBC in valuation. We first...

This paper analyzes how managers of young firms choose among various modes of investor communications, using data on analyst presentations, management earnings forecasts, press releases and corporate finance disbursements for a sample of 645 post-IPO firms. Firms that plan to access capital...

Analysis of a sample of 253 joint venture announcements suggests that joint ventures tend to be announced when the parent firms' performance is deteriorating. However, the parent firms earn positive abnormal returns around the announcement date. There is considerable cross-sectional variation in...