The Effect of Uncertain and Weak Modal Words in 10-K Filings on Analyst Forecast Attributes

Authors

Myung Sub Kim, Myung Sub KimFollow

Document Type

Dissertation

Degree

Doctor of Philosophy (PhD)

Major/Program

Business Administration

First Advisor's Name

Steve Lin

First Advisor's Committee Title

Committee chair

Second Advisor's Name

Clark Wheatley

Second Advisor's Committee Title

Committee member

Third Advisor's Name

Jonathan Milian

Third Advisor's Committee Title

Committee member

Fourth Advisor's Name

Xiaochuan Huang

Fourth Advisor's Committee Title

Committee member

Fifth Advisor's Name

Wen-Hsiu Chou

Fifth Advisor's Committee Title

Committee member

Keywords

Analyst Forecast, 10-K Filings, Uncertain Words, Weak Modal Words

Date of Defense

6-22-2018

Abstract

This study examines the determinants of the use of uncertain and weak modal words in 10-K filings and the effect of these words on analyst forecast attributes. I find that the use of uncertain and weak modal words in 10-K filings is positively (negatively) associated with firm size, volatility of business and operations (firm age and number of business segments). More importantly, after controlling for readability and management tone, I find that the use of uncertain and weak modal words in 10-K filings is associated with greater analyst following, lower forecast dispersion, greater forecast accuracy, and lower uncertainty in analysts’ overall and common information environment. The results of this study provide more insights into why management uses uncertain and weak modal words in 10-K filings and how these words in 10-K filings affect analysts’ behavior and their forecast outcomes.

Identifier

FIDC006848

Recommended Citation

Kim, Myung Sub, "The Effect of Uncertain and Weak Modal Words in 10-K Filings on Analyst Forecast Attributes" (2018). FIU Electronic Theses and Dissertations. 3786.
https://digitalcommons.fiu.edu/etd/3786