Earnings Forecasts Disclosed in the Seo Prospectus: Evidence from an Emerging Market

Journal of Emerging Market Finance, Forthcoming

Posted: 12 Aug 2006 Last revised: 23 Aug 2008

See all articles by Georgia Siougle

Georgia Siougle

Athens University of Economics and Business - Department of Accounting and Finance

Abstract

This study investigates the credibility of earnings forecasts disclosed by companies listed on the Athens Stock Exchange. The focus of the study is on earnings forecasts disclosed in the prospectus of listed firms that are issuing equity through a rights issue. The results of the study show that the earnings forecasts are over-estimated and exhibit low accuracy, a finding suggesting that companies are optimistic when they develop their forecasts. The level of forecast errors can be explained by valuation uncertainty, which is measured by the standard deviation of stock returns prior to the equity offering, and the market-to-book ratio. Furthermore, historical earnings are useful in explaining post equity issue stock prices.

Keywords: Seasoned Equity Offerings, Prospectus Earnings Forecasts, Athens Stock Exchange

JEL Classification: G14, G15, G24, M41, M45, M47

Suggested Citation

Siougle, Georgia, Earnings Forecasts Disclosed in the Seo Prospectus: Evidence from an Emerging Market. Available at SSRN: https://ssrn.com/abstract=923761

Georgia Siougle (Contact Author)

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
GR-104 34 Athens
Greece

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