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The implications of earnings quality for market reactions to annual earnings announcements Chen, Ching-peng
Abstract
This paper assesses the impact of earnings quality on market responses to annual earnings announcements. Earnings quality is measured by the ratio of earnings to funds from operations. The difference in the association between forecast errors and excess returns across the high/low quality earnings subsamples is found to be statistically significant; there is a greater market response to earnings announcements of high-quality firms than to low-quality firms. Hence, earnings quality as measured by the ratio of earnings to funds from operations, is found to have pricing implications. The results are robust across two regression models: OLS on returns ordered in announcement time and SUR/GLS on returns ordered in calendar time.
Item Metadata
Title |
The implications of earnings quality for market reactions to annual earnings announcements
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Creator | |
Publisher |
University of British Columbia
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Date Issued |
1989
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Description |
This paper assesses the impact of earnings quality on market responses to annual earnings
announcements. Earnings quality is measured by the ratio of earnings to funds from
operations. The difference in the association between forecast errors and excess returns
across the high/low quality earnings subsamples is found to be statistically significant;
there is a greater market response to earnings announcements of high-quality firms than
to low-quality firms. Hence, earnings quality as measured by the ratio of earnings to funds
from operations, is found to have pricing implications. The results are robust across two
regression models: OLS on returns ordered in announcement time and SUR/GLS on
returns ordered in calendar time.
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Genre | |
Type | |
Language |
eng
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Date Available |
2012-04-16
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Provider |
Vancouver : University of British Columbia Library
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Rights |
For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use.
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DOI |
10.14288/1.0102444
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URI | |
Degree | |
Program | |
Affiliation | |
Degree Grantor |
University of British Columbia
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Campus | |
Scholarly Level |
Graduate
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Aggregated Source Repository |
DSpace
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Item Media
Item Citations and Data
Rights
For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use.