Do investors value smooth performance?

• 成果类型: Article
• 署名作者: Rountree, Brian; Weston, James P.; Allayannis, George
• 署名单位: Rice University; University of Virginia
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2008.02.002
• 发表日期: 2008
• 页码: 237-251
• 关键词: Cash-flow volatility; Earnings smoothing; RISK-MANAGEMENT

摘要

This paper presents empirical evidence that cash-flow volatility is negatively valued by investors. The magnitude of the effect is substantial with a 1% increase in cash-flow volatility, resulting in approximately a 0.15% decrease in firm value. We show that this increase, however, is not associated with earnings smoothing resulting from managers' accrual estimates, Our results are consistent with a preference by the market for less volatile cash flows and suggest that managers' efforts to produce smooth financial statements add Value, but only via the cash component of earnings. (C) 2008 Elsevier B.V. All rights reserved.