We develop a model of firm valuation to examine the exchange risk sensitivity of 409 U.S. multinational firms during the 1978-89 period. In contrast to previous studies, we find that exchange rate fluctuations do affect firm value. More specifically, we find that approximately sixty percent of...

We find that positive excess (strong) analyst coverage is associated with overvaluation and low future returns. This finding is consistent with the view that excessive analyst coverage, driven by investment banking incentives and analyst self-interests, raises investor optimism causing share...

"We examine whether abnormal analyst coverage influences the external financing and investment decisions of the firm. Controlling for self-selection bias in analysts' excessive coverage, we find that firms with high (low) analyst coverage consistently engage in higher (lower) external financing...

We study the impact of diversification on firm cash flows and excess value. Specifically, we investigate whether there is a direct link between the discount to diversification and excess cash flow reductions around related and unrelated acquisitions. Our results provide empirical support for a...