Analysts' Forecasts Following Forced CEO Changes.

This paper examines analysts' earnings forecasts during the period of uncertainty following a change of chief executive officer ( CEO). It distinguishes between forced and non-forced CEO changes, and examines whether analysts utilize their information advantage to reduce the heightened uncertainty o...

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Publicado en:Abacus Vol. 50; no. 2; pp. 146 - 174
Autores principales: Choi, Ka Wai, Chen, Xiaomeng, Wright, Sue, Wu, Hai
Formato: Artículo
Publicado: Wiley-Blackwell Jun2014
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Analysts' Forecasts Following Forced CEO Changes.
      aug:
        au:
          Choi, Ka Wai
          Chen, Xiaomeng
          Wright, Sue
          Wu, Hai
        affil:
          Faculty of Business and Economics, Macquarie University
          School of Accounting and Business Systems, Australian National University
      su:
        Earnings forecasting
        Uncertainty
        Chief executive officers
        Executive succession
        Business enterprises
        Australia
      sug:
        subj:
          Australia
          Earnings forecasting
          Uncertainty
          Chief executive officers
          Executive succession
          Business enterprises
      keyword:
        Analysts' forecasts
        Forced CEO change
        Forecast accuracy
        Forecast bias
        Forecast dispersion
      ab: This paper examines analysts' earnings forecasts during the period of uncertainty following a change of chief executive officer ( CEO). It distinguishes between forced and non-forced CEO changes, and examines whether analysts utilize their information advantage to reduce the heightened uncertainty of a forced change of CEO. Examining a sample of Australian companies followed by analysts between 1999 and 2009, we find that forecasting accuracy is lower and earnings forecasts are more optimistic for firms experiencing forced CEO turnover compared to firms not undergoing such a change. However, dispersion is not statistically different. The results suggest that forced CEO turnover events provide a challenge to the forecasting environment for analysts. During CEO changes, investors should be aware that forecasts are less accurate and have an optimistic bias.
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    language: English
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      custom: Copyright of Abacus is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use.
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