Using a popular return decomposition, we show that expected returns should on average be positively associated with future return on equity (ROE), controlling for the book-to-market ratio (BM). However, we find that none of the commonly-used implied cost of equity capital estimates (ICCs), which...

We examine whether activists exhibit persistent cross-sectional performance differences in identifying targets to short. We find no evidence of performance persistence using target returns, consistent with Ljungqvist and Qian (2016), but document that the current target is more likely to delist...