We analyze market reaction to targeted stock issuances and investigate possible motives for their use. We find a statistically significant abnormal return of 3.61% within a three-day window around the announcement of proposed targeted stock issuances, possibly attributable to greater information on targeted stock segments as well as monitoring and motivational advantages. We find lower tax-loss carry forwards among firms that issue targeted stock compared to those that spin off segments, suggesting that tax reasons motivate targeted stock use. The return and cash flows of targeted stocks are affected more by their common corporate affiliation, although industry influences remain strong.

We investigate the determinants of discretionary SFAS 106 choices of non-regulated firms. We find that more unionized firms are more likely to use immediate recognition, consistent with incentives to reduce labor renegotiation costs. Immediate recognition is more prevalent among post-adoption plan modifiers, particularly if their transition obligation is large, consistent with incentives to increase future reported earnings. Immediate recognition, together with post-adoption benefit plan reduction, frees future income from the transition obligation amortization expense and adds a positive component as negative prior service costs are amortized. Immediate recognition is less prevalent among firms with higher potential debt contracting costs.

Mounting nuclear plant decommissioning costs and utility deregulation focused attention on accounting for decommissioning liabilities. FASB's Exposure Draft 158-B proposes balance sheet recognition of the projected future decommissioning cost liability at initial plant commission. We expect market valuation of each dollar of decommissioning cost apportioned to utilities to vary with utility-specific factors related to the probability of cost recovery via rates. We find a more negative decommissioning cost/firm value association for utilities with higher business or financial risk. Also, equity value is significantly associated with total decommissioning cost across all nuclear units in which a utility has ownership interest.