Corporate disclosure policy and analyst behavior

Article Abstract:

The relationship between disclosure practices of firms and the number of analysts monitoring the firm and the characteristics of their forecasts was examined. The study employed data from the Report of the Financial Analysts Federation Corporate Information Committee from 1985 to 1989. Results showed that company-provided disclosure is a critical determinant of analyst following and the properties of their predictions. Firms with more informative disclosure policies were found to have a wider analyst following, more accurate analyst earnings forecast, less dispersion among individual analyst forecasts and less volatility in forecast revisions. Such results may result in a lower cot of capital for firms with more information disclosure policies.

Financial analysts

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Corporate disclosure quality and the cost of debt

Article Abstract:

A study contributed to the body of research on the impact of disclosure quality by examining the relationship between the general disclosure quality of a firm and its cost of debt financing. This analysis focused on two measures of cost of debt, namely, the yield to maturity on new debt issues and the total interest cost of new debt issues. Findings revealed that the two measures are negatively related to the disclosure measure. Therefore, firms that were given high rating of disclosure quality by financial analysts have a lower interest effective interest cost of debt financing. Moreover, disclosures were found to be more valuable to firms encountering significant uncertainty, as measured by stock-return variance. Implications are discussed.

Corporate bonds, Debt financing (Corporations), Debt financing

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Segment profitability, misevaluation, and corporate divestment

Article Abstract:

The reasons for divestments in a firm form the perspective of cross-segment earnings shifting are presented.

Corporate Profits, Management dynamics, Hong Kong, Capital funds & cash flow, Management, Profit, Accounting and auditing, Profits, Company business management, Divestments (Sanctions)

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