Stock returns around acquisition announcements are widely viewed as being reflective of the net present value created by these transactions. As such, announcement returns should correlate with acquisition outcomes. Using a new measure of realized transaction-level acquisition failure, as well as...

Why is the mere announcement of an open-market share repurchase program, which involves no commitment to purchase shares, regarded as good news by the market? The first part of this paper provides a theoretical model to resolve this puzzle. The model predicts that firms with large underpricing...

The left-digit effect is defined as when a change in the left-most digit of a price (e.g., 7 to 6 when $7.00 drops to $6.99) dramatically affects the perception of the magnitude. Using a random sample of more than 100 million stock transactions, we find excess buying by liquidity demanders when...

This paper provides evidence that stock traders focus on round numbers as cognitive reference points for value. Using a random sample of more than 100 million stock transactions, we find excess buying (selling) by liquidity demanders at all price points one penny below (above) round numbers....

Acquisition announcement returns are widely considered market-based assessments of value creation. Unfortunately, the data do not support this conjecture. We show that commonly used and new measures of realized acquisition outcomes are correlated among themselves, though derived from different...