This study examines the extent to which analyst recommendations were useful in identifying earnings surprises during the pre- and post- Regulation FD periods. A comparative analysis of the association between recommendation revisions and subsequent earnings surprises suggests a significant...

This study examines the relationship between the value of financial analysts' recommendations and the intensity of firms' research and development (R&D) expenditures. We conduct univariate, portfolio and regression analyses using a sample of 8,620 public firms for the period 1993-2004. The...

There is an ongoing debate about whether executives receive excessive compensation, and if so, how to control it. Several countries have instituted say-on-pay rules (shareholders' right to vote on executive compensation) to reduce excessive compensation. However, determining the effectiveness of...

We examine the effect on earnings forecast accuracy when financial analysts add or drop coverage. We find that the accuracy of analysts' first forecast for a firm (newly added coverage) is lower relative to their peers. In addition, the accuracy of their last forecast (just before coverage is...

This study examines investors' reaction to managers' use of contrastive words (words that introduce corrective and/or unexpected information) during the question and answer (Q&A) sessions of conference calls. We document evidence that managers' use of contrastive words is an indicator of the...

Auditor independence is a guiding principle of the relationship between auditors and clients, and a key component of outsiders' acceptance of firms' financial statements. As recent accounting scandals have illustrated, the audit process is meaningless without the auditor's impartial judgment....

Excess taxation of capital gains is a by-product of inflation in a tax system that uses nominal values as its basis. Studies by Feldstein, Green and Sheshinsky [JPE 1978] and Feldstein and Slemrod [NBER WP 234, 1978] analyze related macroeconomic distortions associated with corporate stock...

In setting the allowable rate of return of public utilities, U.S. regulatory agencies and the courts continue to rely on the standard discounted-cash-flow (DCF) method based on the Gordon-Miller-Modigliani model of share valuation under constant growth - a model which ignores personal taxes....

The interaction of inflation with a progressive tax system has been known to cause tax rates, and thus tax liabilities, to escalate with nominal income. Often blamed for having undesirable effects on investment and wealth, this feature of modern tax systems has not received formal treatment in...

The personal tax impact on share prices of a permanent distribution via stock repurchase was first modeled by Bierman and West (JF 1966, #4) who argued that the tax impact is minimized under permanent ownership by the same shareholders. Elton and Gruber (JF 1968, #1) faulted the original model...