Numerous empirical studies have demonstrated that asset prices react rapidly, if at all, to news published in the mass media. In many cases, the information has been discounted and prices have already moved upon primary publication through news wires, press releases or firm announcements. Any...

This study examines the usefulness to investors of the “monetary correction” (corrección monetaria) required under Chilean accounting standards. The monetary correction arises when nonmonetary assets and liabilities and owners’ equity are restated for changes in the purchasing power of...

The SEC’s Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is often claimed to provide vital “extra information” for the investment decisions of investors: information that compensates for the reporting weaknesses of financial statements....

In this study, we develop a technique for estimating a firm’s expected cost of equity capital derived from its stock price and analysts’ consensus earnings forecasts. Our estimation method, which is based on the residual income valuation model, extends and refines currently available...

Using a Verreccia [1983]-type model, we study the optimal voluntary disclosure strategy of a manager with private information that helps the market interpret financial information the firm is required to report. In equilibrium, the manager’s disclosure strategy enhances upward or mitigates...

(VF)Cet article propose de mesurer la pertinence économique de la comptabilisation des dépréciations du goodwill. Pour cela, la réaction du marché français à l’annonce de 75 dépréciations de goodwill sur la période 2000-2004 est examinée. L’annonce de ces dépréciations provoque...

Research on disclosure and capital markets focuses primarily on the amount of information provided but pays little attention to the presentation format of this information. This paper examines the impact of graph utilization and graph quality (distortion) on the cost of equity capital,...

We reexamine the descriptive ability of the conventional wisdom that earnings announcements made after trading and on Friday are dominated by bad news in light of the 24/7 media coverage and other technological changes of the 1990’s. We find that the change in media coverage has facilitated a...

We document considerable return comovement associated with accruals after controlling for other common factors. An accrual-based factor-mimicking portfolio has a Sharpe ratio of 0.16, higher than that of the market factor or the SMB and HML factors of Fama and French (1993). In time series...