Journal Article Announcements Get access Charles Bean, Charles Bean Search for other works by this author on: Oxford Academic Google Scholar John Moore John Moore Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 56, Issue 4, October 1989, Page 475, https://doi.org/10.1093/restud/56.4.475 Published: 01 October 1989

Abstract We provide evidence that equity investors are slow to process information about how current oil price changes affect future earnings announcements. Stock prices respond to lagged quarterly oil price changes when firms start announcing earnings in the next quarter. A cross-sectional equity trading strategy that exploits this predictability yields an annualized Sharpe ratio of 0.50. Our oil-response forecast strategy earns especially high returns after large absolute oil price changes, in recessions or bear markets, and during peak earnings season. The predictability we document is consistent with limited attention, is not driven by risk factor exposure, and survives several robustness tests. (JEL G10, G11, G14, G40, Q41)

[Miller and Modigliani (1961) show that in perfect and complete financial markets a firm's value is unaffected by its dividend policy. Much of the more recent research has demonstrated that dividend policy becomes important in the presence of taxation, asymmetric information, incomplete contracts, institutional constraints, and transaction costs. By examining the effects of dividend policies on 475 British firms existing between 1895 and 1905, and consequently operating in an environment of very low taxation with an absence of institutional constraints, we find strong support for asymmetric information theories of dividend policy, and little support for agency models.]

This paper demonstrates that the behavior of the conventional Phelps-Taylor model of overlapping wage contracts stands in stark contrast with important features of U. S. macro data for inflation and output. In particular, the Phelps-Taylor specification implies far too little inflation persistence. We present a new contracting model, in which agents are concerned with relative real wages, that is data-consistent. In a specification that nests both models, we resoundingly reject the conventional contracting model, but cannot reject the new contracting model.

Abstract Frequently, the decision to replace or not to replace a plant asset is handled as a separate problem and is not included as a part of the general capital investment problem. This separation has probably resulted in part from the attention given to replacement decisions in engineering economy studies. Engineering studies are made to determine which units of equipment can give the best service at the lowest possible costs. Equipment in operation is in constant competition with new and improved models as they become available on the market and at some point in the life of a piece of equipment replacement may bring about the desired performance at a minimum annual cost. The objective in many replacement studies is to time the replacements so that annual costs will be minimized. The replacement type of decision is also isolated from general capital investment planning because of a difference in point of view that may be attributable to a difference in the level of administrative control. In replacement studies the equipment cost, the future costs of operation and the future salvage values are carefully estimated and applied in an effort to hold costs to a minimum.

Abstract A graph similar in concept to the conventional profit-volume graph can be used in capital investment planning and can be especially useful in the analysis of relatively complex investment situations. The net discounted cash flow line for the most profitable investment candidate crosses the expected cost of capital line or zone at the highest point. In a large number of investment situations, this line will also cross the internal rate of return line at the highest discount rate and will be above all other discounted cash flow lines at all points. There are also investment situations in which the discounted cash flow lines for the various alternatives will cross. The line for the most profitable alternative does not necessarily lie to the right of the other lines when it crosses over the internal rate of return line. It will, however, be the highest line when it crosses the expected cost of capital line or zone. The line of limitation can be used to predict the cost within reasonable limits.

Reviews the book "Advanced Accounting, an Organisational Approach," by Norton M. Bedford, Kenneth W. Perry and Arthur R. Wyatt.

Reviews the book "Electronic Data Processing, an Introduction," by F.W. Martin.

Reviews the book "Management Accounting," by Robert N.Anthony.

Abstract This article focuses on experience in teaching electronic data processing without a computer. The objective specified in the three courses is lot to train computer operators or programmers. Rather, the courses are intended to give the students enough information so they are able to evaluate intelligently the impact an significance of electronic computers on the type of work for which they are being trained. In the classroom it has been possible to teach the students the principles of flow charting and writing programs of instructions, but one does not get a sense of completeness unless it is possible to carry a problem all the way from definition to actual operation of the computer. In order to do this, arrangements were made with the Rich Electronic Computer Center at Georgia Institute of Technology to use their electronic computers for actual problem solving. Information coming back to the campus from former students indicates that even these introductory courses have had a significant effect on the direction and type of work being done by several of our graduates in business administration.