This study examines whether the COVID-19 pandemic affected accounting information in the US. We compare discretionary accruals and the explanatory power of earnings between 2019 and 2020. We document a significant increase in discretionary accruals from 2019 to 2020, suggesting that firms...

Prior research documents significant negative long-term stock returns following bond-rating downgrades. Some downgraded firms are placed on credit watches before downgrades, and we find that the post-downgrade stock underperformance of such firms is significantly reduced. We explore two...

Dividend distribution enhances information transmission, and mitigates agency conflicts by restricting managers' access to free cash flow, and exposing firms to the scrutiny and monitoring by market participants when raising external capital. The reduction in agency costs and improvement in...

Adding a return factor based on capital investment into standard, calendar-time factor regressions makes underperformance following seasoned equity offerings largely insignificant and reduces its magnitude by 37-46%. The reason is that issuers invest more than nonissuers matched on size and...

An investment factor, long in low investment stocks and short in high investment stocks, helps explain the new issues puzzle. Adding this factor into standard factor regressions reduces substantially the magnitude of the underperformance following equity and debt offerings and the composite...

There is increasing interest in the idea of allocating across factors instead of traditional asset classes. Allocating across factors has the intuitive appeal of allocating across building blocks that are in theory purer sources of return. In practice, factor-based allocation is not easy, since...

For any given level of risk, investors generally aspire to engage in as many profit making opportunities as possible. “Risk” is the fuel source that makes profits possible. Yet, like any fuel source, risk should come with a warning label. It can be used to warm one's house or to burn it...

We examine the drivers of increasing women's representation on boards in American firms. During 1998-2014, the proportion of firms with female directors on their boards almost doubled to approximately 78%, while the percentage of female directors increased almost five-fold to a share of 15%. Our...

An important question for firm management and markets is whether superior capabilities to mitigate the impact of adverse business scenarios leads to higher firm performance and valuation. We address this question by using a new broadly applicable methodology based on the insight that effective...