A vast literature following Hayn [1995] and Burgstahler and Dichev [1997] attributed the so-called “discontinuities” in earnings distributions around zero to earnings management. Despite recent evidence that these discontinuities are likely caused by other factors, researchers and teachers...

A vast literature following Hayn [1995] and Burgstahler and Dichev [1997] attributed the so-called 'discontinuities' in earnings distributions around zero to earnings management. Despite recent evidence that these discontinuities are likely caused by other factors, researchers and teachers...

We extend Easton's (2007) review of the literature on accounting-based estimates of the expected rate of return on equity capital, which we refer to as the ERR. We begin by reiterating the reasons why accounting-based estimates are used. Next, we briefly review the recent literature that focuses...