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Why do firms manage risk? According to theory, firms hedge to mitigate credit rationing, to alleviate information asymmetry, and to reduce the risk of financial distress. Empirical support for these theories is mixed. Our paper addresses the “why” by directly questioning the managers that...
Persistent link: https://www.econbiz.de/10013006433
Stock characteristics have two sources of predictive power. First, a characteristic might be valuable in identifying high or low expected returns across industries. Second, a characteristic might be useful in identifying individual stock expected returns within an industry. Past studies...
Persistent link: https://www.econbiz.de/10013321780
We examine how broker characteristics impact the performance of their recommendations in Europe. In contrast to extant research, we focus on a non-U.S. sample that post-dates the important regulatory changes of 2003-2004. Our research has three intriguing findings. First, we show that more...
Persistent link: https://www.econbiz.de/10013124723
This teaching guide is based on a comprehensive survey as well as in-depth interviews of Chief Financial Officers (CFOs). We ask the CFOs about the definition and drivers of earnings quality, with a special emphasis on the prevalence and detection of earnings misrepresentation. CFOs believe that...
Persistent link: https://www.econbiz.de/10013073661
The World's best equity analysts are based in Asia – these analysts are better at forecasting stock prices than their peers in the US, Europe and the UK. In comparison with the other regions, the performance of buy recommendations made by Asia analysts is superior and consistent over time. The...
Persistent link: https://www.econbiz.de/10013074823
We recently conducted a comprehensive survey that analyzes how senior financial executives make decisions related to performance measurement and voluntary disclosure. In particular, we ask CFOs what earnings benchmarks they care about and which factors motivate executives to exercise discretion,...
Persistent link: https://www.econbiz.de/10012734913
We survey 401 financial executives, and conduct in-depth interviews with an additional 20, to determine the key factors that drive decisions related to performance measurement and voluntary disclosure. The majority of firms view earnings, especially EPS, as the key metric for an external...
Persistent link: https://www.econbiz.de/10012785018
We apply state-of-the-art Bayesian machine learning to test whether we can extract valuable information from analysts' recommendations of stock performance. We use a probabilistic model for independent Bayesian classifier combination that has been successfully applied in both the physical and...
Persistent link: https://www.econbiz.de/10012897756
We survey more than 1,100 risk managers from around the world on their risk management policies, goals, and perceptions. We find evidence consistent with some of the traditional theories of risk management, but not with all. We then analyze the reasons beyond “why” or “why not” firms...
Persistent link: https://www.econbiz.de/10012924419
We ask nearly 400 CFOs about the definition and drivers of earnings quality, with a special emphasis on the prevalence and detection of earnings misrepresentation. CFOs believe that the hallmarks of earnings quality are sustainability, absence of one-time items, and backing by actual cash flows....
Persistent link: https://www.econbiz.de/10013034441