Do investors value disclosed versus recognised employee share options differently?
Ang, Hong Nee and Pinnuck, Matthew 2010, Do investors value disclosed versus recognised employee share options differently?, in AFAANZ 2010 : Accounting and Finance Association of Australia and New Zealand Annual Conference, AFAANZ, [Christchurch, New Zealand], pp. 1-40.
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Do investors value disclosed versus recognised employee share options differently?
Prior research provides evidence consistent with footnote disclosures are being valued by investors. However, there are arguments as to whether the market would acquire and/or process disclosed versus recognised information in the same way. Prior studies have been inconclusive on the findings. This research provides evidence for the conditions under which differential valuation exist. Three factors are examined. First, I investigate whether the differential valuation is related to the reliability of the accounting estimates. Second, due to higher processing costs on disclosures relative to “recognised” information, I investigate whether sophistication of investors contributes to the differential valuation. Finally, I examine systematic biases arisen from how investors process information due to limited attention paid to disclosures. The results show that the market does process information in a complicated way. Investors discern the reliability of accounting estimates and value them differently when processing the information.
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eng
Field of Research
150199 Accounting, Auditing and Accountability not elsewhere classified
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