Individual equity securities are prone to large and abrupt stock price drops. In this article, the authors provide a framework for measuring, forecasting, and avoiding such stock price crashes. First, the authors identify the events that most frequently cause stock prices to crash, and then they...

Prior studies suggest that accounting information risk, primarily idiosyncratic in nature, can be diversified away. I show that accounting information risk, proxied by accruals quality, is priced even if it is entirely idiosyncratic. Building on a model developed in the ambiguity literature, I...

Recent empirical and anecdotal evidence suggests that U.S. firms hold a significant amount of cash on their balance sheets. Motivated by this observation, we seek to examine whether a firm's customer base composition, in particular the amount of sales transactions with the U.S. government,...

In an environment where capital market participants collectively possess superior information about a decision faced by a firm manager, we use an experimental market to analyze the effectiveness with which the market communicates this information to the manager through stock price. We do so in a...

We examine the voluntary disclosure behavior of peer firms of hostile takeover targets. We find that peer firms under control threat use a disclosure strategy that emphasizes bad news: they provide more bad news forecasts, tend to bundle bad news forecasts with earnings announcements, use more...

We draw on Merton (1987) to develop predictions for the benefits of voluntary disclosures made by firms pursuing an initial public offering (IPO) prior to when they begin to provide regulated financial information via their IPO prospectus. We find that voluntarily issuing press releases and...

We derive a measure of earnings management cost and the associated equilibrium level of earnings management from the cross-sectional properties of earnings and prices. This approach enables us to separate economic shocks from reporting discretion by modeling the economic trade-off faced by...

Using survey data from a sample of senior investment professionals from mainstream (i.e. not SRI funds) investment organizations we provide insights into why and how investors use reported environmental, social and governance (ESG) information. Relevance to investment performance is the most...

This paper examines the association between insider trading before an earnings announcement and the magnitude of the post-earnings announcement drift (PEAD). Consistent with insiders' private information being incorporated into prices through their trading, we find PEAD is significantly lower...

Arabic Abstract: تهدف هذه الدراسة إلى تحديد مدى ممارسة تمهيد الدخل في الشركات المساهمة السعودية المدرجة في السوق المالية السعودية (تداول)، والتعرف على علاقة بعض خصائص...