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Can Managers Forecast Aggregate Market Returns?
Previous studies have found that the proportion of equity in total new debt and equity issues is negatively correlated with future equity market returns. Researchers have interpreted this finding as evidence that corporate managers are able to predict the systematic component of their stock returns...
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| Published in: | The Journal of finance (New York) 2005-04, Vol.60 (2), p.963-986 |
|---|---|
| Main Authors: | , , |
| Format: | Article |
| Language: | English |
| Subjects: | |
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| Online Access: | Get full text |
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| cited_by | cdi_FETCH-LOGICAL-a5802-98fdf73ba014eb46272138058cd9e1729376c02e3b1cd2f04dcb33f7d507d3003 |
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| cites | cdi_FETCH-LOGICAL-a5802-98fdf73ba014eb46272138058cd9e1729376c02e3b1cd2f04dcb33f7d507d3003 |
| container_end_page | 986 |
| container_issue | 2 |
| container_start_page | 963 |
| container_title | The Journal of finance (New York) |
| container_volume | 60 |
| creator | BUTLER, ALEXANDER W. GRULLON, GUSTAVO WESTON, JAMES P. |
| description | Previous studies have found that the proportion of equity in total new debt and equity issues is negatively correlated with future equity market returns. Researchers have interpreted this finding as evidence that corporate managers are able to predict the systematic component of their stock returns and to issue equity when the market is overvalued. In this article we show that the predictive power of the share of equity in total new issues stems from pseudo-market timing and not from any abnormal ability of managers to time the equity markets. |
| doi_str_mv | 10.1111/j.1540-6261.2005.00752.x |
| format | article |
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| fulltext | fulltext |
| identifier | ISSN: 0022-1082 |
| ispartof | The Journal of finance (New York), 2005-04, Vol.60 (2), p.963-986 |
| issn | 0022-1082 1540-6261 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_38067987 |
| source | International Bibliography of the Social Sciences (IBSS); JSTOR Archival Journals and Primary Sources Collection; Wiley-Blackwell Read & Publish Collection |
| subjects | Correlation analysis Debt management Debt to equity ratio Economic crisis Equity Finance Financial economics Financial management Forecasting models Forecasts Futures markets Issued capital Market timing Modeling Predictive modeling Rates of return Securities offerings Stock markets Stock returns Studies |
| title | Can Managers Forecast Aggregate Market Returns? |
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