Penetrating the book-to-market black box: the R&D effect

Article Abstract:

R&D activities affect the book-to-market phenomenon, the positive correlation between book-to-market and subsequent stock returns. This is evident in an analysis of a large sample of R&D companies with abnormal profits, which shows a strong correlation between R&D capital and subsequent stock returns. This relationship is thought to be a result of an extra-market risk factor inherent in R&D rather than mispricing of stock.

Research and Development in the Physical, Engineering, and Life Sciences, Accounting Methods, Commercial physical research, Research & Development-Industry, Analysis, Industrial research, Accounting and auditing, Accounting, Corporations, Valuation, Return on investment, Rate of return, Book value (Accounting)

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Explaining the Short- and Long-Term IPO Anomalies in the US by R&D

Article Abstract:

More than 2,500 initial public offerings issued in the US between 1980 and 1995 are used to validate the hypothesis that issuers' research and development activities significantly impact initial underpricing and long-term performance of IPOs.

United States, Science & research, Research, Economic aspects, Going public (Securities), Initial public offerings, Company public offering

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Use of Forecasts of Earnings to Estimate and Compare Cost of Capital Across Regimes

Article Abstract:

The analysis indicates that assumptions concerning growth beyond a short forecast horizon may significantly impact estimates regarding expected rate of return, which could lead to spurious inferences.

Influence

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