The Impact of Split Adjusting and Rounding on Analysts' Forecast Error Calculations

@article{Baber2002TheIO,
  title={The Impact of Split Adjusting and Rounding on Analysts' Forecast Error Calculations},
  author={William R. Baber and Sok-Hyon Kang},
  journal={Accounting Horizons},
  year={2002},
  volume={16},
  pages={277-289}
}
  • William R. Baber, Sok-Hyon Kang
  • Published 2002
  • Economics
  • Accounting Horizons
  • This study finds that analysts' forecast data files, commonly used by accountants and financial analysts to estimate market expectations about earnings announcements, contain inaccurate historical data for companies that split their common stock. These inaccuracies result because stock split adjustments are made retrospectively and split‐adjusted data are rounded. Moreover, because well‐performing firms are more likely to execute stock splits, the consequences of the stock split problem are… CONTINUE READING
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