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Title: The accuracy of IPO earnings forecasts in Thailand and their relationships with stock market valuation
Authors: Ravi Lonkani
Michael Firth
Keywords: Business, Management and Accounting
Issue Date: 1-Jan-2005
Abstract: In order to help reduce information asymmetry between managers and prospective investors, IPO prospectuses in Thailand are required to publish managers' forecasts of the forthcoming year's earnings. This type of direct disclosure is especially important in a developing economy such as Thailand where financial intermediaries and information vendors are relatively sparse, and where investors are rarely professionals. Our results demonstrate that managers' earnings forecasts are much more accurate than extrapolations of historical earnings. We show that forecast accuracy is related to underpricing, and it has a directional, but not statistical, association with one-year stock returns and one-year wealth relatives.
ISSN: 00014788
Appears in Collections:CMUL: Journal Articles

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