This paper defines an intertemporal tax discontinuity (ITD) as a circumstance in which different tax rates are applied to gains and losses realized at one point in time versus some other point in time, and studies the effects of ITDs on market behaviors at the time of disclosures of firm...

We study the use of properties of analysts' forecasts as surrogates for unobservable constructs in empirical research. We provide an analytical framework with which to examine past empirical practice and contemplate future empirical research. Our model is used to interpret existing empirical...

We offer an economic framework for generating predictions about the demand for conservative accounting reports. We define conservatism as: More timely recognition of losses than gains as a result of the costs and benefits of reporting verifiable information by managers and/or firms being...

In this paper we investigate a firm's decision to redact proprietary information from its material contract filings. Information redaction results when the Security and Exchange Commission (SEC) grants a firm's request to withhold information from investors in its material contract filings,...

In this paper we examine whether and how accounting information about a firm manifests in its cost of capital, despite the forces of diversification. We build a model that is consistent with the CAPM and explicitly allows for multiple securities whose cash flows are correlated. We demonstrate...

Strategic disclosure, which we define as the reporting of good news and the withholding of bad news, provides an explanation for a well-documented dynamic pattern in returns: The negative relation between return shocks and conditional return volatility. Black (1976) dubbed this relation the...

In this paper, we establish a link between information quality, firms' capital investment decisions and their cost of capital. We characterize asset prices in a market equilibrium framework with perfect competition for firm shares and derive a pricing equation that is equivalent to the CAPM....

We empirically examine standard agency predictions about how performance measures are optimally weighted to provide CEO incentives. Consistent with prior empirical research, we document that the relative weight on price and non-price performance measures in CEO cash pay is a decreasing function...

Underpricing in IPOs is a significant cost of raising capital that theories purport arises from adverse selection at the IPO date. Disclosure is a tool firms can use to ameliorate adverse selection. We show that greater disclosure frequency in the pre-IPO period is associated with lower...

We examine whether publicly available performance measures other than stock price are economically significant in explaining changes in CEOs' firm-specific wealth. Similar to Antle and Smith [1986], we measure a CEO's firm-specific wealth changes as the sum of total annual pay and changes in the...