We test the implications of anchoring bias associated with forecast earnings per share (FEPS) for forecast errors, earnings surprises, stock returns, and stock splits. We find that analysts make optimistic (pessimistic) forecasts when a firm’s FEPS is lower (higher) than the industry median....

IPO comparable stocks that are discussed by the local media around the IPO filing period are known in Hong Kong as IPO shadow stocks. I show that IPO shadow stocks experience significant price run-ups during the IPO filing period of the public offering tranche. The level of run-ups is positively...

ldquo;Anchoringrdquo; describes the fact that in forming numerical estimates of uncertain quantities, adjustments in assessments away from an arbitrary initial value are often insufficient. We show that this cognitive bias has significant economic consequences for the efficiency of financial...

Hou (2007) finds that within an industry, stock returns of larger firms lead those of smaller firms, suggesting an intra-industry information diffusion process. Most industry leaders, however, have business segments in other industries (henceforth, minor-segment industries), whereas most small...

Building on two sources of exogenous shocks to analyst coverage (broker closures and mergers), we explore the causal effects of analyst coverage on mitigating managerial expropriation of outside shareholders. We find that as a firm experiences an exogenous decrease in analyst coverage,...