Bradshaw, Richardson, and Sloan (BRS) find a negative relation between their comprehensive measure of corporate financing activities and future stock returns and future profitability. Noticing that accounting accruals are increases in net operating assets on a company's balance sheet, we...

The Sarbanes-Oxley Act (SOX) mandates management evaluation and independent audits of internal control effectiveness. The mandate is costly to firms but may yield benefits through lower information risk that translates into lower cost of equity. We use unaudited pre-SOX 404 disclosures and SOX...

In this study, we develop a technique for estimating a firm's expected cost of equity capital derived from its stock price and analysts' consensus forecasts. Our estimation method based on the residual income valuation model builds on Gebhardt/Lee/Swaminathan (2001) and...

This paper investigates the market and accounting based valuation effects of troubled debt restructurings (TDR) in financially distressed debtor firms. I first rely on extant valuation theories to predict the impact of a TDR on shareholders' wealth. Next, some empirical evidence on the...

This paper examines whether valuation estimates based on analysts' earnings forecasts are consistent with their stock recommendations. Because earnings forecasts are linked to value and recommendations reflect analysts' opinions of value relative to current price, earnings forecasts and stock...

This study utilizes firm-specific time-series data to estimate the economic value of the Research and Development (Ramp;D) expenditures that investors consider an asset to the firm. The study uses a modification of the Ohlson (1995) model to estimate the persistence of abnormal earnings, the...

It is widely agreed that corporate financial reports provide deficient information about intangible assets. However, investors are exposed to substantial information beyond financial reports, such as managers' direct communications to capital markets and analysts' reports. We ask: To what extent...

After a string of years in which security analysts' top stock picks significantly outperformed their pans, the years 2000 and 2001 were disasters. During those two years, the stocks least favored by analysts earned an average annualized market-adjusted return of 13.44 percent whereas the stocks...

This paper assumes that there are two methods of estimating the value of a firm's assets, called the historical cost (HC) and market value (MV) methods, respectively. It assumes that the true value of the assets and the two estimates are all random variables, jointly distributed as a...

Wealth and growth in today's economy are primarily driven by intangible (intellectual) assets. Physical and financial assets are rapidly becoming commodities, while abnormal profits, dominant competitive positions, and sometimes even temporary monopolies are achieved by the sound deployment of...