Equity price reaction to the pronouncements related to accounting for income taxes

Article Abstract:

A study was conducted to investigate the impact on equity price of two generally income increasing standards on accounting for income taxes. The two accounting standards involved in the study were the Statements on Financial Accounting Standards (SFAS) No. 96 and No. 109. Using the multivariate regression model developed by Schipper and Thompson (1983), it is demonstrated that firms achieve significant positive abnormal returns at the time that the Exposure Drafts that lead to SFAS No. 96 and No. 109 were issued. With the aid of the portfolio weighting procedure proposed by Sefcik and Thompson (1986), it is shown that the equity price reaction to the standards is influenced by the magnitude of their income effects and the economic consequences of a specific income effect.

Standards, Prices and rates, Stocks, Accounting and auditing, Accounting, Income tax, Stock prices

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Early identification of firms requiring debt restructuring

Article Abstract:

Logistic regression models were developed to identify in advance troubled firms that will require debt restructuring. Data from commercial database vendors on debt-restructured firms were used. The models prove that it is possible to identify one or two years in advance and with reasonable accuracy those firms that will require debt restructuring.

Models, External debt relief, Debt relief

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Predicting corporate takeovers

Article Abstract:

A decision tree is designed for corporate takeover forecasting. Companies with low sales growth and high investment opportunity are ripe for acquisition.

United States, Acquisitions Analysis, Statistical Data Included, Methods, Usage, Acquisitions and mergers, Financial analysis, Decision tree, Decision trees

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