In this paper, we discuss a framework for approaching the problem of how best to estimate stock price given a set of accounting information. We apply the theory of inverse probability to formulate price predictions based on an estimate of the mean of the posterior distribution for price, given...

Do pre-offer target stock price runups increase bidder takeover costs? We present model-based tests of this issue assuming runups are caused by signals that inform investors about potential takeover synergies. Rational deal anticipation implies a relation between target runups and markups (offer...