Changes in share prices as a response to earnings forecasts regarding future real profits
Changes in share prices as a response to earnings forecasts regarding future real profits
Author(s): Leszek CzerwonkaSubject(s): Business Economy / Management, Policy, planning, forecast and speculation
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: evaluation of share prices; earnings forecasts; event study;
Summary/Abstract: One of the analytical methods in financial economics is an event study. The event study allows to measure influence of some information (for example: changes at the board of directors, merger notices, and other) on value of companies. According to the event study method the abnormal change of price is measured, which is caused by disclosing the information. The aim of this study is to measure the influence of disclosing initial earnings forecasts on share prices as well as examination of the relationships between abnormal returns and prospective profits of companies. Each new, additional piece of information has influence on share price, however, it should still be the object of investigations how investors connect each piece of information with share prices.
Journal: Analele Ştiinţifice ale Universităţii »Alexandru Ioan Cuza« din Iaşi. Ştiinţe economice
- Issue Year: 56/2009
- Issue No: 1
- Page Range: 81-90
- Page Count: 10
- Language: English
