Confident and optimistic forward-looking statements and the moderating influence of quantitative earnings forecasts

• المؤلف الرئيسي: Chee, Vincent Guo Qiang
• مؤلفون آخرون: -
• التنسيق: Theses and Dissertations
• اللغة: English
• منشور في: Nanyang Technological University 2018
• الموضوعات: DRNTU::Business::Finance::Corporate governance
• الوصول للمادة أونلاين: http://hdl.handle.net/10356/73868
• المؤسسة: Nanyang Technological University

In this paper, I examine the impact of confident-plus-optimistic qualitative forward-looking statements on investors’ judgments. I find that investors’ valuation judgments are less favorable when investors see a confident-plus-optimistic qualitative forward-looking statement in the earnings press release than when they see an optimistic-only qualitative forward-looking statement. I also find that the above-mentioned difference in judgments becomes smaller when managers bundle the earnings press release with a quantitative earnings forecast. Managers presumably use a confident-plus-optimistic qualitative forward-looking statement in order to elicit more favorable investor judgments. Nonetheless, by providing evidence of a less favorable reaction, my results indicate that investors end up reacting in a manner that deviates from how managers would ideally want investors to react. Overall, my results provide insights to managers, investors, regulators, and academic researchers.