Asked by derrick johnson on Jul 03, 2024
Verified
Academic studies have found that actual earnings
A) fall randomly around the consensus estimate.
B) tend to come in at or above the forecast.
C) almost never seem to beat estimates by a penny or two a share,no matter what the economic conditions.
D) rarely are close to analysts' forecast earnings for the company.
Consensus Estimate
The average estimate for a company's future earnings per share or other financial metrics, derived from the forecasts of analysts covering the stock.
Academic Studies
Systematic investigations into a particular subject, field, or issue, often conducted in educational settings to advance knowledge.
- Investigate how revenue recognition affects financial statements and the operational success of a company.
Verified Answer
EL
Emerald LafromboiseJul 09, 2024
Final Answer :
B
Explanation :
Academic studies have consistently found that actual earnings tend to come in at or above the forecast. This is known as the "earnings surprise" phenomenon, where companies consistently beat earnings estimates.
Learning Objectives
- Investigate how revenue recognition affects financial statements and the operational success of a company.