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Comment: Efficient Capital Markets and the Information Content of Accounting Numbers

Published online by Cambridge University Press:  19 October 2009

Bryan Heathcotte
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Extract

For purposes of discussing Professor Emery's work, we may adopt the following symbolism: (1) let SEEj denote the standard error about the regression-established trend of the reported earnings stream of firm j; (2) let VAR(ΔEPSj) denote the variance of the annual changes in the reported earnings stream of firm j; (3) let denote the variance of the annual changes in the cthsimulated (unsmoothed) earnings stream for firm j; (4) let CORRj be the coefficient of correlation between the reported earnings stream and the price series for firm j; (5) let be the coefficient of correlation between the cthsimulated earnings stream and the price series for firm j; (6) let Nj be the number of the C unsmoothed earnings streams generated for firm j for which ; and (7) let Nj* be the number of these Nj earnings streams for which .

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 9 , Issue 2 , March 1974 , pp. 151 - 153
Copyright
Copyright © School of Business Administration, University of Washington 1974

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