Since 2014
Balance sheet classification of compound financial instruments and the judgment of securities market analysts
Journal of Economic & Financial Studies
View Archive Info| Field | Value | |
| Title |
Balance sheet classification of compound financial instruments and the judgment of securities market analysts
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| Creator |
da Costa Jr, Jorge Vieira
Neto, Alfredo Sarlo da Silva, Andrea Bispo |
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| Subject |
Accounting, Finance and Economics
securities market analyst, compound financial instrument, balance-sheet management, IAS n. 32 Financial Instruments |
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| Description |
This paper investigate the effect of balance sheet classification of a compound financial instrument on the analyst’s judgment on estimates in target prices using an experimental settings. The experimental design involves both buy and sales-side analysts grouped into three subsamples with limited information set about the company used in the experiment and different information regarding the accounting for the compound financial instrument (IAS 32 model, SOA model and NEA model) after the following event: a private placement of a mandatorily convertible debenture to finance the acquisition of another company abroad. We apply nonparametric means and bootstrap test. Our result show that regardless of balance sheet classification of the compound financial instrument, analysts are likely to treat it conservatively as a liability. Moreover, if the compound financial instrument is wholly classified as a liability and the company is highly leveraged, they tend to discount firm’s share price.
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| Publisher |
LAR Center Press
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| Contributor |
no one
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| Date |
2016-12-16
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion Peer-reviewed Article |
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| Format |
application/pdf
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| Identifier |
http://journalofeconomics.org/index.php/site/article/view/264
10.18533/jefs.v4i05.264 |
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| Source |
Journal of Economic & Financial Studies; Vol 4, No 05 (2016): October; 37-54
2379-9471 2379-9463 |
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| Language |
eng
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| Relation |
http://journalofeconomics.org/index.php/site/article/view/264/303
http://journalofeconomics.org/index.php/site/article/downloadSuppFile/264/42 http://journalofeconomics.org/index.php/site/article/downloadSuppFile/264/44 http://journalofeconomics.org/index.php/site/article/downloadSuppFile/264/45 |
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| Rights |
Copyright (c) 2016 Jorge Vieira da Costa Jr, Alfredo Sarlo Neto, Andrea Bispo da Silva
http://creativecommons.org/licenses/by/4.0 |
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