We develop a method for estimating the private value of knowing the future realization of some financial statistics, and then we apply the measure to the familiar ratios from the DuPont decomposition of return on equity. The estimation is grounded in the standard rational expectations model, adapted to accommodate relative risk aversion, and determines an investor's willingness to pay for information denominated in units of a riskless asset (e.g., money). The method can accommodate different levels of investable wealth, multiple assets, and any information system regarding those assets. We use this method to document several interesting contrasts. An investor with $1 million in wealth who already knows all the current DuPont ratios, as well as the most recent analyst forecast, would be willing to pay $2861 to know all of next year's ratios. This amount increases to $3158 for firms below the median size. We find that the value of financial information is higher in periods of high sentiment and for firms that are hard to value or hard to arbitrage (i.e., firms with high sentiment exposure). In practical terms, this suggests investors prioritize their information search to small, young, loss‐making, high‐growth, low book‐to‐market, non‐dividend‐paying, and illiquid firms. In terms of the DuPont components, we find that knowing next year's operating profit margin alone is worth $1226, whereas knowing next year's leverage is worth only $170 and knowing next year's sales growth is worth only $184. In practical terms, this suggests that investors allocate more attention to forecasting profitability and less attention to forecasting sales growth. Finally, we demonstrate that the estimated value of financial statistics increases substantially when we assume the investor can trade in the firm asset and can also hedge using an industry exchange‐traded fund (ETF). This result suggests that professional investors integrate their information search with their hedging behavior.

The Dodd-Frank Act allows the SEC to choose either an administrative proceeding or a federal court as an enforcement venue for resolving violations of federal securities laws. I examine determinants and consequences of the SEC's choice of enforcement venue after the Dodd-Frank Act. Results show that material cases are 28–35 percent more likely to be assigned to federal courts, and politically connected defendants are about 14 percent more likely to be routed to administrative proceedings. While monetary penalties by venue are statistically indifferent, politically connected defendants in administrative proceedings are associated with lower penalties. Additionally, I find that administrative proceedings process cases 27 times faster than federal courts. Results suggest the SEC's private incentives affect enforcement venue selection and possibly enforcement outcomes. The SEC is more likely to use administrative proceedings when political and economic costs are greater, and use federal courts when political and economic benefits are greater.

This study investigates the association between quantitative disclosure and information risk, hypothesizing that a greater proportion of numerical information in earnings conference calls decreases information risk and thus increases firm value. We find that, even after controlling for earnings information, more extensive numerical disclosure correlates positively with earnings announcement returns. This effect concentrates in firms with poorer information environments and during periods of heightened performance uncertainty. Finally, we show that a greater proportion of numerical disclosure reduces implied volatility, bid-ask spread, and implied cost of capital. Our findings highlight numerical disclosure's role in reducing information risk and emphasize its importance in financial disclosures.

Does enhanced regulatory transparency facilitate alignment of private and public enforcement? Utilizing the SEC's 2004 decision to publicly disclose its comment letters, we explore the actions of the SEC and shareholder litigants. We find the two parties converge more on enforcement targets after the public disclosure. The increased alignment is attributable to public scrutiny of SEC oversight enhancing regulator incentives and reducing regulatory capture, and to shareholder plaintiffs gaining information previously accessible only by regulators, enabling litigants to identify cases with “merit.” These findings suggest regulatory transparency enhances the complementarity of public and private enforcement, potentially improving enforcement outcomes.