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- Title
The Effects of the Reporting of Off-Balance-Sheet Investments on EPS Uncertainty, Leverage and Shareholders' Wealth.
- Authors
Mantecon, Tomas; Conover, James; Altintig, Acya; Song, Kyojik
- Abstract
The degree of control over operations affects the quality of information provided to investors. Uncertainty about operating performance increases following the first equity method (EM) reporting of off-balance-sheet investments, but only when the investments are joint ventures (JVs). Partners in JVs report lower levels of debt. These results are not due to informational deficiencies of the EM, but to the riskier nature of JVs. Long-run stock performance analysis indicates that investors experience normal risk-adjusted returns when investing in firms with economically significant off-balance sheet investments.
- Subjects
OFF balance sheet financing; BUSINESS finance; FINANCIAL statements; EARNINGS per share; STOCKS (Finance); JOINT ventures
- Publication
Financial Management (Wiley-Blackwell), 2012, Vol 41, Issue 4, p1009
- ISSN
0046-3892
- Publication type
Article
- DOI
10.1111/j.1755-053X.2012.01195.x