Discussion of “Signaling firm value to active investors”
Review of Accounting Studies · 2010 · Volume 15 · Issue 3
DOI: 10.1007/s11142-010-9123-6
Abstract
Baldenius and Meng (Rev Account Stud,2010) use a signaling model to study the economic effects of active investors to whom the founder of a firm wants to sell shares. This discussion considers the model structure, the main results and the economics behind them, and the key assumptions that drive these results. It also comments on signaling models in general, the use of additional signals, and the ability of the results to derive predictions.
Keywords
Signaling, Active investor, Pooling equilibrium, Earnings forecasts
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