Synopsis of Research
Investor Recognition and Stock Returns
RES 341
This study's basis is the ability of Robert C. Merton's theoretical analysis, the study shows that contemporaneous stock returns are positively related to investor recognition; future stock returns are negatively related to changes in investor recognition; the above relations are stronger for stocks with greater idiosyncratic risk; and corporate investment and financing activities are both positively related to investor recognition. The research suggested that investors and managers who are concerned with firm valuation should consider investor recognition in addition to accounting information and related investment fundamentals. (Lehavy and Sloan 2008).
In this article the authors put forth the theory of Merton's...
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Excerpt from file: SynopsisofResearch InvestorRecognitionandStockReturns RES341 ThisstudysbasisistheabilityofRobertC.Mertonstheoreticalanalysis,thestudy showsthatcontemporaneousstockreturnsarepositivelyrelatedtoinvestor recognition;futurestockreturnsarenegativelyrelatedtochangesininvestor
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