Profit comparisons, market prices and managers' judgments about negotiated transfer prices

Article Abstract:

A study was conducted to investigate experienced managers' judgments about the impacts of market price and accounting profit information on negotiated transfer prices. Subjects were 55 managers taking part in executive education programs at two leading universities. Unlike earlier research, which conclude that divisional managers are concerned only about their own profits, results of this study demonstrated that experienced managers anticipated negotiated transfer prices to be influenced by the aversion of bargainers to unequal profits, even in the presence of external market alternatives generating unequal profits. Findings also revealed that market price is not automatically a clear basis for the estimation of the position of the other party. Therefore, the existence of a competitive external market price does not necessarily streamline the transfer pricing problem.

Pricing, Transfer pricing

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Stock distribution relationship to unexpected future earnings

Article Abstract:

A positive relationship exists between stock distribution and unexpected future earnings. Firms issuing stocks report higher unexpected income in the quarter and full year after the distribution announcement than companies who do not. This implies that investors alter their income expectations when stock splits or stock dividends are announced. This may be due to the perception that information about expected future earnings are incorporated in stock distribution announcements.

Methods, Management, Dividends, Stock splitting

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Predisclosure information, form capitalization, and earnings information transfers

Article Abstract:

The research suggests that size-related differential information hypothesis can be applied to earnings information transfers. Conclusions are discussed.

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