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The implications of earnings quality for market reactions to annual earnings announcements

This paper assesses the impact of earnings quality on market responses to annual earnings
announcements. Earnings quality is measured by the ratio of earnings to funds from
operations. The difference in the association between forecast errors and excess returns
across the high/low quality earnings subsamples is found to be statistically significant;
there is a greater market response to earnings announcements of high-quality firms than
to low-quality firms. Hence, earnings quality as measured by the ratio of earnings to funds
from operations, is found to have pricing implications. The results are robust across two
regression models: OLS on returns ordered in announcement time and SUR/GLS on
returns ordered in calendar time. / Business, Sauder School of / Graduate

Identiferoai:union.ndltd.org:UBC/oai:circle.library.ubc.ca:2429/42009
Date January 1989
CreatorsChen, Ching-peng
PublisherUniversity of British Columbia
Source SetsUniversity of British Columbia
LanguageEnglish
Detected LanguageEnglish
TypeText, Thesis/Dissertation
RightsFor non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use.

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