DeAngelo and DeAngelo (2006) (D&D hereafter) argue that ‘payout policy is not irrelevant and investment is not the sole determinant of value, even in frictionless markets.' We first re-examine their critique using M&M's (1961) multiperiod valuation framework and identify non-essential...

This paper examines the use of valuation models by UK investment analysts. The study is based on, first, semi-structured interviews with 35 sell-side analysts from 10 leading investment banks and with 7 buy-side analysts from 3 asset management firms and, second, content analysis based on 98...

We examine the information content of earnings components conditional on the existence of misclassification of earnings in the income statement. We develop a vector autoregression (VAR) of a set of accounting variables that accommodates, besides other variables, two components of transitory...

This paper confirms that US evidence of a negative relationship between earnings persistence and earnings volatility applies to UK firms over the period 1991–2010. Our analytical framework highlights the possibility that this result may reflect downward estimation bias in earnings persistence...