In this paper we examine the relation between equity mispricing and arbitrage risk, and find that stocks with high arbitrage risk have higher estimated mispricing than stocks with low arbitrage risk. These results are not limited to high book-to-market or small capitalization stocks, and they...

In this paper, we examine whether abnormal analyst coverage influences the external financing of the firm. Controlling for self-selection bias in analysts' excessive coverage, we find that firms with high (low) excess analyst coverage consistently engage in higher (lower) external financing than...

In this paper, we examine whether the external financing and investment rate of the firm are influenced by abnormal analyst coverage. We find that firms with high (low) excess analyst coverage have consistently higher (lower) external financing and investment rate than firms of similar size in...

We investigate whether divergence of opinion among investors, manifested in the dispersion of analysts' earnings forecasts, plays an important role in asset pricing. Specifically, we test whether disagreement can explain the cross-sectional return difference between value and growth stocks over...

Several empirical studies show that investment strategies that favor the purchase of stocks with low prices relative to dividends, earnings, book value or other measures of value yield higher returns. Some of these studies imply that investors are too optimistic about (glamour) stocks that have...

We appraise the monitoring activity of security analysis from the perspective of the manager-shareholder conflict. Using a data set of more than 7,000 company-year observations for manufacturing companies tracked by security analysts over the 1988-94 period, we found that security analysis acts...

Divergence of opinions among investors, manifested in the dispersion of analysts' earnings forecasts, may play an important role in asset pricing. This article reports tests of whether disagreement can explain the cross-sectional return difference between value and growth (or glamour) stocks in...

In this paper we examine whether the negative excess value of stocks (stock discounts in the Berger and Ofek (1995) spirit) is associated with low excess analyst coverage over the 1979-1997 period. We define excess analyst coverage as the difference between a firm s actual analyst following and...

In this paper we examine whether the negative excess value of stocks (stock discounts in the Berger and Ofek (1995) spirit) is associated with low excess analyst coverage over the 1979-1997 period. We define excess analyst coverage as the difference between a firm's actual analyst following and...

Several empirical studies show that investment strategies that favor the purchase of stocks with low prices relative to dividends, earnings, book values or other measures of value yield higher returns. Some of these studies imply that investors are too optimistic about (glamour) stocks that have...