Abstrakt
This paper examines the extent to which financial signaling affects the analysts' and managers' forecast releases. The findings give evidence of heterogeneity of analysts' forecast errors between firms with strong financial indicators (high signal group), weak financial indicators (low signal group), and those with both positive and negative signals (mixed signal group).
The paper further indicates that managers' forecast releases also depend on the type of the rm and that managers may try to use the heterogeneity in analysts' treatment.