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paper presentation

    SheChih Chiu
    Earnings Manipulations or Dividend Policies:The Timing of...
    paper presentation posted August 4, 2011 by SheChih Chiu, last edited August 4, 2011 
    Earnings Manipulations or Dividend Policies:The Timing of the Exercises ofExecutive Stock Options
    author or authors:
    Chin-Chen Chien and She-ChihChiu
    presentation session:
    Research Interaction Forum Session
    August 9, 2011 3:00am - 4:30am

     We propose two hypotheses for investigating managers’ behavior on timing executive stock options. First, we argue that mean-reverting nature of discretionary accruals play an important role on earnings management. Second, we propose that managers may also consider cash dividends in their decision of stock option exercises. With a sample of observations from 1992 to 2004, we find that managers may intend to influence stock returns through abnormal earnings management though such attempt is unsuccessful. In addition, reversion of discretionary accruals plays a role on managers’ managing discretionary accruals. Furthermore, the results show that the incremental effect of cash dividends is positively associated with managers’ abnormally large exercise of ESOs.


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