The functional relation between expected stock prices and accounting information is analyzed through the theory of inverse probability. The approach models the mean of the posterior distribution for price, given the information that the accounting process provides. The implications of alternative assumptions about accounting measurement error and the unconditional price distribution are discussed. Our most refined model is consistent with recent empirical evidence showing convexity in the relationship between price and accounting information. Empirical tests, while exploratory, provide further evidence of a nonlinear relation between stock price and accounting measures of earnings and book value.
Review of Accounting Studies – Springer Journals
Published: Jan 13, 2005
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera