Insider trading and the information content of earnings

Article Abstract:

Insider trading prior to an earnings announcement provides a greater amount of predisclosure information available to make inferences about a firm's forthcoming earnings, thus reducing the uncertainty that investors perceive is related to the earnings of a firm. For firms whose announcements are preceded by insider trading, the information content of earnings announcements will be smaller, as against those whose announcements are not preceded by insider trading. This was affirmed in an examination of the relation between insider trading prior to earnings announcements and the information content of earnings.

Corporate Profits

---

Discussion of 'The Articulation of Returns and Accounting-Related Variables When Returns Lead Earnings: UK Evidence.'

Article Abstract:

A number of scholars have proposed the theory that corporate returns and prices lead earnings. Most corporate net assets are treated in the books as if they were zero net-present-value investments while share prices reflect the total anticipated value of the investments. Further, write-downs can effect carrying values when conservative accounting methods are used. Author John O'Hanlon makes an important contribution to research on this phenomenon by reflecting it in terms of observable variables, namely, the accounting-related ratios used in his study.

Accounting Methods, Financial Management, Case studies, Accounting, Corporations, Criticism and interpretation, Valuation, Ratio analysis, O'Hanlon, John

---

Regulated managerial insider trading as a mechanism to facilitate shareholder control

Article Abstract:

Research into the role of insider trading in facilitating shareholder control is presented. It is concluded that the insider could be permitted to profit from private information as long as his trading also brings advantages to shareholders stemming from improved shareholder control over corporate decisions.

Similar abstracts:

• Abstracts: On bizarreness in the entertainment industry. The managerial implications of the learning organization: a new tool for internal marketing
• Abstracts: Transfer pricing and formulary apportionment. Taxing cross-border combinations: nationalistic rules in a global economy
• Abstracts: Indebted to gearing for better returns. Why it's not so bad to be up to your neck in debt
• Abstracts: Audiences for contemporary dance: key issues arising from a major study in Sheffield. Measuring the fragmenting television audience
• Abstracts: Market-to-book ratios, equity retention, and management ownership in Finnish initial public offerings. Who benefits from secondary market price stabilization of IPOs?

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.