IR Papers: Quiz edition
1. Which of these five countries is the clear leader in terms of corporate governance?
2. Which relationship is correct?
(a) Internet disclosure leads to profitability
(b) Profitability leads to inter- net disclosure
3. True or false? SOX has had a positive effect on the value of firms worldwide.
4. What percentage of top Nigerian companies disclose financial information on their website?
5. Did the mandatory adoption of IFRS affect the earnings quality of Canadian firms?
6. Which CEO earnings call statement is more likely to lead to a higher share price, more pay and better job security?
(a) ‘My hard work and my sound business strategy have led this company to record profits.’
(b) ‘Our corporate performance results from booming customer demand and lousy competition.’
7. As a bidder, should you voluntarily disclose post- acquisition earnings forecasts?
8. Firms can increase analyst following by increasing intellectual capital (IC) disclosure. In the case of Danish bio-techs, which two IC components are important for analysts?
(c) Strategic statements
(e) Information technology
Answers (one point for each correct response)
1: (e) Australian researchers put Oman first followed by Kuwait and the UAE. Bahrain and Qatar rank fourth and fifth, respectively.
2: Both Studying the websites of 171 international shipping corporations in 2010, a Greek research team finds a positive relationship between the extent of internet disclosure and corporate performance. Investigators conclude that ‘greater internet disclosure is not a mere effect of sound financial performance, but also, perhaps more importantly, a requirement for it.’
3: False Examining cross-listings in Germany, the US and Asia, researchers led by Marcelo Bianconi, associate professor of economics at Tufts University in Massachusetts, find SOX has actually had a negative effect on worldwide company value.
4: (b) While most large Nigerian companies have a website, only just over half use them for financial disclosure, according to a study published in the International Journal of Financial Research.
5: No In fact, Canadian investigators find absolute discretionary accruals of mining sector firms increased in the post-IFRS period.
6: (b) A Duke University study finds the market punishes self-serving attributions. It also documents a negative relationship between internal attributions and subsequent earnings performance. Building on earlier research showing CEOs who tended to blow their own horn were also more likely to get fired, the dissertation by Zhenhua Chen finds no evidence CEOs gain any other type of economic benefit (such as compensation) from such behavior.
7: Yes Sampling US acquisitions from 1990 to 2007, investigators led by Amir Amel-Zadeh at the University of Cambridge find that disclosing forecasts reduces the premium necessary to convince targets to accept a takeover offer. They also show disclosing weakens the generally negative market reaction to the announcement of acquisitions and boosts the odds of a successful takeover bid.
8: (a) & (c) Scientists at Aalborg University in Denmark find analysts consider all other types of IC disclosure to be insignificant.
0: You didn’t get question three?
1-7: Those of you with ADHD know who you are.
8: Out there, somewhere, is the perfect job for people like you.