Corporate bond repurchases and earnings management
Thesis (Ph. D.)--Massachusetts Institute of Technology, Sloan School of Management, 2013.
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| Format: | Thesis |
| Language: | eng |
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Massachusetts Institute of Technology
2013
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| Online Access: | http://hdl.handle.net/1721.1/82291 |
| _version_ | 1811091589950341120 |
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| author | Lemayian, Zawadi Rehema |
| author2 | Michelle Hanlon. |
| author_facet | Michelle Hanlon. Lemayian, Zawadi Rehema |
| author_sort | Lemayian, Zawadi Rehema |
| collection | MIT |
| description | Thesis (Ph. D.)--Massachusetts Institute of Technology, Sloan School of Management, 2013. |
| first_indexed | 2024-09-23T15:04:47Z |
| format | Thesis |
| id | mit-1721.1/82291 |
| institution | Massachusetts Institute of Technology |
| language | eng |
| last_indexed | 2024-09-23T15:04:47Z |
| publishDate | 2013 |
| publisher | Massachusetts Institute of Technology |
| record_format | dspace |
| spelling | mit-1721.1/822912019-04-10T23:57:36Z Corporate bond repurchases and earnings management Lemayian, Zawadi Rehema Michelle Hanlon. Sloan School of Management. Sloan School of Management. Sloan School of Management. Thesis (Ph. D.)--Massachusetts Institute of Technology, Sloan School of Management, 2013. Cataloged from PDF version of thesis. Includes bibliographical references (p. 42-43). This paper investigates whether earnings management incentives are associated with gains/losses recognized when firms repurchase bonds. The research question is motivated by the inclusion of these gains/losses in firms' income, which creates the potential to use them to manage earnings. Using a sample of 778 bond repurchases from 1994 to 2011, I find that firms record larger extinguishment gains when earnings are (i) short of analysts' forecasts, or (ii) low relative to the prior year's earnings. Furthermore, the effect is more pronounced after the introduction of SFAS 145 which moved gains/losses from the extinguishment of debt from extraordinary items to operating income. In addition, the result is weaker after SFAS 159 which allowed firms to report liabilities at fair value, thus causing smaller gains to be recorded upon repurchase of debt. This study contributes to the literature on earnings management by providing evidence of real earnings management through bond repurchases and to the literature on bond buybacks by identifying accounting incentives as a determinant of the size of extinguishment gains. by Zawadi Rehema Lemayian. Ph.D. 2013-11-18T19:04:51Z 2013-11-18T19:04:51Z 2013 2013 Thesis http://hdl.handle.net/1721.1/82291 861338477 eng M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. http://dspace.mit.edu/handle/1721.1/7582 64 p. application/pdf Massachusetts Institute of Technology |
| spellingShingle | Sloan School of Management. Lemayian, Zawadi Rehema Corporate bond repurchases and earnings management |
| title | Corporate bond repurchases and earnings management |
| title_full | Corporate bond repurchases and earnings management |
| title_fullStr | Corporate bond repurchases and earnings management |
| title_full_unstemmed | Corporate bond repurchases and earnings management |
| title_short | Corporate bond repurchases and earnings management |
| title_sort | corporate bond repurchases and earnings management |
| topic | Sloan School of Management. |
| url | http://hdl.handle.net/1721.1/82291 |
| work_keys_str_mv | AT lemayianzawadirehema corporatebondrepurchasesandearningsmanagement |