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EARNINGS MANAGEMENT AND EARNINGS FORECAST DISPERSION

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Firms that barely beat the market expectation show higher consensus of earnings forecasts than do their counterparts that barely miss it. Differences in stock returns around earnings announcements between firms that beat and miss the market expectation are statistically significant when the consensus of earnings forecasts is high. Thus, managers appear to be more concerned about beating the market expectation when the dispersion of earnings forecasts is low. Otherwise, they might experience a large amount of opportunity costs as a firm's stock prices decline.

Abstract

INTRODUCTION

DEVELOPMENT OF HYPOTHESES

EMPIRICAL RESULTS AND ANALYSIS SAMPLE

EMPIRICAL RESULTS

SUPPLEMENT ARY RESULTS

CONCLUSION

REFERENCES

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