This paper provides evidence that firms issuing new shares at higher discounts and hence with larger expected dividend increases, use their opportunities for earnings management in such a way that, by the year of a share issue, they report larger earnings in excess of current dividends than...

This paper suggests that firms use their opportunities for earnings management to inform the capital market of the quality of their equity issues. We argue that firms issuing new shares with higher discounts, and hence with larger expected dividend increases, are likely to report larger earnings...

Finnish firms are known to manage earnings downwards to avoid income taxes. This study suggests that they simultaneously manage earnings upwards in a smaller scale. The idea behind this behaviour is that humans may perceive a profit of, say, 301 million as abnormally larger than a profit of 298...