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Persistent link: https://www.econbiz.de/10005492493
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....
Persistent link: https://www.econbiz.de/10011120732
type="main" <title type="main">ABSTRACT</title> <p>We posit that management forecasts, which are predictable transformations of realized earnings without random errors, are more informative than unbiased forecasts, which manifest small but unpredictable errors, even if biased forecasts are less accurate. Consistent with this...</p>
Persistent link: https://www.econbiz.de/10011038347
Prior research provides mixed results on the capacity of American shareholder activists to improve managerial behavior. In Japan, however, alternative means of external control (e.g. take-over, litigations) are not as effective as in the U.S. Challenging the management during the annual meeting...
Persistent link: https://www.econbiz.de/10005045135
We provide evidence that the financing decisions of companies that are audited by a Big Six auditor are less affected by information asymmetry. Specifically, these companies enjoy greater financial flexibility and depend less on favorable market conditions for their equity issuance decisions...
Persistent link: https://www.econbiz.de/10005045253
We examine how corporate culture influences firm behavior. Prior research suggests a link between individual religiosity and risk aversion. We find that this relationship also influences organizational behavior. Firms located in counties with higher levels of religiosity display lower degrees of...
Persistent link: https://www.econbiz.de/10005067205
Prior evidence that higher-quality financial reporting improves capital investment efficiency leaves unaddressed whether it reduces over- or under-investment. This study provides evidence of both in documenting a conditional negative (positive) association between financial reporting quality and...
Persistent link: https://www.econbiz.de/10008521717
Persistent link: https://www.econbiz.de/10005306994
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We provide evidence that analyst coverage affects security issuance. First, firms covered by fewer analysts are less likely to issue equity as opposed to debt. They issue equity less frequently, but when they do so, it is in larger amounts. Moreover, these firms depend more on favorable market...
Persistent link: https://www.econbiz.de/10005309302