This study finds that pro-forma earnings forecasts by bidding firms during acquisitions are associated with a higher likelihood of deal completion, expedited deal closing, and with a lower acquisition premium − but only in stock-financed acquisitions. Analysts also respond to these forecasts...

Managers frequently project high synergistic gains when announcing M&As. This paper analyzes when promised synergies are value-relevant. Using text analytical methods, we only find a positive relationship between synergy projections and announcement returns when promised numerical projections...

In a seminal paper, Dechow, Sloan and Soliman (2004) develop a price-implied measure for equity duration and for its estimation they employ parsimonious but relatively crude procedures. Hence, these authors claim that improvements in procedures should lead to more accurate and useful estimates...

We examine how the patterns of inter-industry trade flows impact the transfer of information and economic shocks. We provide evidence that the intensity of transfers depends on industries' positions within the economy. In particular, some industries occupy central positions in the flow of trade,...

This paper examines whether financial statement information can predict future realized volatility incremental to the volatility implied by option market prices. Prior research establishes that option-implied volatility is a biased estimator of future realized volatility. I use an analytical...

In this study, I document that accruals are useful for predicting future company performance. The usefulness of accruals is examined by comparing the performance of four simple prediction models, containing aggregate and disaggregated earnings, in predicting ex post intrinsic value. Moreover, I...

Several articles in highly regarded news outlets over the last decade have argued that firms holding relatively more cash are favored by investors. The contention is those firms holding cash will have better access to good investment prospects. This view contradicts the Jensen (1986) free cash...

This paper examines the impact of expectations manipulation on the usefulness of analyst forecasts in the residual income valuation model. Recognizing that firms may guide down analyst forecast to either truthfully communicate information (legitimate guidance) or mislead analysts to produce...

The purpose of this study is to examine the impact of the choice of cut-off points, sampling procedures, and the business cycle on the accuracy of bankruptcy prediction models. Misclassification can result in erroneous predictions leading to prohibitive costs to firms, investors and the economy....