Previous research documents two puzzling findings that cast doubt on the usefulness of accounting information to investors: the declining power of street EPS in explaining earnings announcement returns and the increasing price reactions to earnings announcements. I show this evidence is due to...

Previous research documents two puzzling results that cast doubt on the usefulness of accounting information to investors: the declining power of street EPS in explaining earnings announcement returns and increasing price reactions to earnings announcements. I show this evidence is due to...

This paper develops an analytically coherent yet parsimonious framework which explains market returns in terms of contemporaneous information. It anchors on the idea that valuation (static perspective) can be connected to the dynamics that explains returns, and vice versa. The framework requires...