Essays on analyst and management forecasts.

摘要

This dissertation studies the issues on analyst forecasts and management forecasts. The first essay examines the rationale behind analysts' inclusion and exclusion decisions of nonrecurring items in street earnings. The second essay examines the impact of Regulation of Takeovers and Security Holder Communications on management disclosure of synergy forecasts at the time of merger announcement.;Essay 1: An Analysis of Nonrecurring Items Included in and Excluded from Street Earnings. Given the recent controversy over deviations of street earnings from GAAP earnings, we show in this paper that nonrecurring items analysts keep in street earnings are more persistent and have higher valuation multiples than items they exclude from street earnings. In addition, we find no evidence that the differential pricing of the included and excluded items leads to future abnormal returns. If the primary use of street earnings is to value a stock as analysts claim, our results suggest that analysts have the expertise in processing earnings information and that certain items appear justifiably excluded.;Essay 2: The Impact of Regulation of Takeovers and Security Holder Communications on Management Disclosure of Synergy Forecasts: Evidence from Bank Mergers. Regulation of Takeovers and Security Holder Communications (Reg MA) in 2000 removes previous regulatory constraints on pre-filing communication with investors about forthcoming merger transactions. This study evaluates the impact of Reg MA on management disclosure of synergy forecasts at the time of merger announcement. Focusing on mergers in the banking industry during 1996 to 2005, I show that disclosure frequency has significantly increased after Reg MA. Credibility of management synergy forecasts has also significantly improved, especially for deals in relatively poor information environments. The credibility improvement is largely attributable to the expanded concurrent supplementary disclosure allowed by the greater communication flexibility under Reg MA.