We formalize the effects of an earnings disclosure on security prices under an assumption of limited liability. We derive various non-linear relations between equity prices and earnings under a variety of capital structure assumptions and, if possible, tie the relations attained to results from...

Qualitative disclosure accompanying an earnings release is incrementally informative to earnings news (i.e., it is an information substitute for earnings) and it reflects the information content of earnings news (i.e., it is an information complement to earnings). When management provides...

This paper provides evidence that uncontested director elections provide informative polls of investor perceptions regarding board performance. We find that higher (lower) vote approval is associated with lower (higher) stock price reactions to subsequent announcements of management turnovers....

The literature in economics and finance document that asset bubbles can emerge and remain sustained for a variety of reasons. In this paper, we develop an analytical model to characterize two types of rational bubbles linked to accounting disclosures, drift bubbles and sensitivity bubbles. We...

We decompose quantitative management earnings forecasts into macroeconomic and firm-specific components to determine the extent to which voluntary disclosure provided by management has macroeconomic information content. We provide evidence that the forecasts of bellwether firms, which are...

An inherent benefit of fair value accounting relative to historical cost accounting is that it impounds relevant information into financial statements in a timely manner. Assessing the extent to which this benefit is realized, however, is often impossible because the fair value updates for...