The Association between Unsystematic Security Returns and the Magnitude of Earnings Forecast Errors

Beaver, William H.; Clarke, Roger; Wright, William F.

doi:10.2307/2490507

Cited by 371 publications

(161 citation statements)

References 22 publications

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“…Ball and Brown (1968), in a seminal study, found a positive and statistically significant association between earnings and equity value. Beaver, Clark, and Wright (1979) found similar results and corroborated the initial findings of Ball and Brown (1968). Subsequent studies (Barth et al 1992;Collins and Kothari 1989) again found similar results.…”

Section: Studies Examining the Association Of Earnings And Book Valuesupporting

confidence: 82%

The Role of Earnings and Book Values in Pricing Stocks: Evidence from Turkey

Anandarajan¹,

Hasan²,

Isik³

et al. 2006

Advances in International Accounting

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• We would like to thank Drs. Da-Hsien Bao for their useful comments and insights. 1 THE ROLE OF EARNINGS AND BOOK VALUES IN PRICING STOCKS: EVIDENCE FROM TURKEY AbstractIn this study, we examine factors associated with equity valuation in a newly emerging market, Turkey.In the United States and other developed countries, research indicates that both earnings and book value are important predictors of equity valuation. In Turkey, earnings appears to have information content but earnings, by itself, appears to be declining in importance over time. Book value adjusted for inflation has a stronger association with equity values. In the inflationary and risky environment of Turkey, where future value of earnings is quite uncertain, investors may be paying less attention to earnings and more attention to book values. With respect to the role of book value there are competing explanations. While some researchers conclude that it is only important because it is a control for scale differences, (Barth and Kallapur 1996) others conclude that it is relevant as a proxy for normal earnings (Ohlson 1995). Still others conclude that it is only relevant in the valuation of loss making and generally unsuccessful firms (Berger, Ofek and Swary 1997;Burgstahler and Dichev 1997). The additional contribution of this study is to show that book value is also important as a value proxy for firms operating in environments where there is rampant inflation. Our study also indicates that, overall, earnings and inflation-adjusted book values combined virtually explain almost 75 percent of the variation in equity prices in Turkey.

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Section: Studies Examining the Association Of Earnings And Book Valuesupporting

confidence: 82%

The Role of Earnings and Book Values in Pricing Stocks: Evidence from Turkey

Anandarajan¹,

Hasan²,

Isik³

et al. 2006

Advances in International Accounting

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“…Logo, a governança corporativa pode influenciar na decisão do investimento do acionista e consequentemente sobre o retorno das ações. Em decorrência disso, a terceira hipótese é: Beaver (1979) que estudaram a relevância da informação contábil para o mercado de capitais. Assim para investir, os acionistas levam em consideração a rentabilidade gerada pela empresa e isso consequentemente impacta no retorno do título.…”

Section: Referencial Teórico 21 Teoria Dos Stakeholders E As Hipótesesunclassified

Relationship Between Climate Risk Disclosure and Abnormal Return of Brasilian Companies

Gomes

Koui

Bruni³

et al. 2017

RUC

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“…These start with Ball and Brown (1968), and Beaver (1968), which, according to Yamamoto and Salotti (2006) were the precursors of this type of study. Other important studies, according to Kothari (2001), and Iudícibus and Lopes (2004), have been: Beaver, Clarke, and Wright (1979) ;Beaver, Lamber, and Morse (1980) ;Collins, Maydew, and Weiss (1997) ;Brown et al (1999);and Lopes (2001and Lopes ( , 2002aand Lopes ( and 2002b.…”

Section: Value Relevance: the Study Of The Relevance Of Accounting Inmentioning

confidence: 99%

Analysis of the Relevance of Information Content of the Value Added Statement in the Brazilian Capital Markets

Machado

Macedo

Machado

2015

Rev. contab. finanç.

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The usefulness of financial statements depends, fundamentally, on the degree of relevance of the information they disclose to users. Thus, studies that measure the relevance of accounting information to the users of financial statements are of some importance. One line of research within this subject is in ascertaining the relevance and importance of accounting information for the capital markets: if a particular item of accounting information is minimally reflected in the price of a share, it is because this information has relevance, at least at a certain level of significance, for investors and analysts of the capital markets. This present study aims to analyze the relevance, in the Brazilian capital markets, of the information content of the Value Added Statement (or VAS) -referred to in Brazil as the Demonstração do Valor Adicionado, or DVA. It analyzed the ratio between stock price and Wealth created per share (WCPS), using linear regressions, for the period 2005-2011, for non-financial listed companies included in Melhores & Maiores ('Biggest & Best'), an annual listing published by Exame Magazine in Brazil. As a secondary objective, this article seeks to establish whether WCPS represents a better indication of a company's result than Net profit per share (in this study, referred to as NPPS). The empirical evidence that was found supports the concept that the VAS has relevant information content, because it shows a capacity to explain a variation in the share price of the companies studied. Additionally, the relationship between WCPS and the stock price was shown to be significant, even after the inclusion of the control variables Stockholders' equity per share (which we abbreviate in this study to SEPS) and NPPS. Finally, the evidence found indicates that the market reacts more to WCPS (Wealth created per share) than to NPPS. Thus, the results obtained give some indication that, for the Brazilian capital markets, WCPS may be a better proxy concept for referring to a company's result than NPPS.

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The Association between Unsystematic Security Returns and the Magnitude of Earnings Forecast Errors

Cited by 371 publications

References 22 publications

The Role of Earnings and Book Values in Pricing Stocks: Evidence from Turkey

The Role of Earnings and Book Values in Pricing Stocks: Evidence from Turkey

Relationship Between Climate Risk Disclosure and Abnormal Return of Brasilian Companies

Analysis of the Relevance of Information Content of the Value Added Statement in the Brazilian Capital Markets

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