We study the relation between the percentage of outstanding shares held by a firm's largest institutional owner and the bid-ask spread on that firm's shares, a measure of information risk. We find that the greater the percentage of shares held by the largest institutional investor, the greater...

Existing research documents that firms employing relatively high levels of stock option-based compensation more frequently report quarterly earnings that meet or exceed analysts' forecasts. This paper examines the roles of income-increasing accounting choices and management guidance to analysts...

This study examines the usefulness of interim income tax disclosures in predicting future earnings and analysts' forecast errors. The integral view of interim financial reporting requires managers to make their best estimate of the effective income tax rate expected to be in effect for the year....

We find that firms with higher quality disclosures have lower effective bid-ask spreads and lower adverse selection spread components. In contrast, we also find that firms with higher quality disclosures have lower quoted depths, resulting in no unambiguous conclusion regarding market liquidity...

Existing research suggests adverse selection spread components are positively related to trade size, consistent with informed traders trading in larger sizes. However, if market makers use quoted depth to limit losses to informed traders, the size of a trade relative to the depth quoted at the...

We evaluate the ability of the mean analyst forecast to effectively summarize analysts' information. We show analytically that even if analysts possess the ability and intention to forecast earnings truthfully, the mean forecast underweights analysts' private information. Thus, the mean does not...