We study a voluntary disclosure model with uncertain information endowment and a possibly relevant external signal (e.g., a peer’s financial report). The manager may disclose the firm value before or after the external signal (“early” or “late” disclosure). We show that favorable...

We examine how uncertain veracity of external news influences investor beliefs, market prices and corporate disclosures. Despite assuming independence between the news' veracity and the firm’s endowment with private information, we find that favorable news is taken “with a grain of salt”...