Journal article
Are Book-Tax Differences Mispriced?
The Accounting review, Vol.98(3), pp.285-306
05/01/2023
DOI: 10.2308/TAR-2020-0181
Abstract
I examine whether book-tax differences (BTDs) are mispriced. I predict that BTD mispricing is the operating cash flows-to-price (CFO/P) anomaly in disguise. Using both time-series asset pricing tests and cross-sectional returns tests, I provide consistent evidence that returns to trading on BTDs are explained by CFO/P. Rather than being an independent anomaly, the findings indicate that any evidence of BTD mispricing is subsumed by the broader CFO/P anomaly. These findings stand in contrast to many studies that infer BTDs possess unique information for future earnings reflected in stock prices with a delay.JEL Classifications: G12; G14; M41.
Details
- Title: Subtitle
- Are Book-Tax Differences Mispriced?
- Creators
- Bradford F. Hepfer - Mitchell Institute
- Resource Type
- Journal article
- Publication Details
- The Accounting review, Vol.98(3), pp.285-306
- Publisher
- Amer Accounting Assoc
- DOI
- 10.2308/TAR-2020-0181
- ISSN
- 0001-4826
- eISSN
- 1558-7967
- Number of pages
- 22
- Grant note
- Tippie College of Business at The University of Iowa Ballard and Seashore Dissertation Fellowship Mays Business School at Texas AM University AICPA Foundation Accounting Doctoral Scholars Program
- Language
- English
- Date published
- 05/01/2023
- Academic Unit
- Accounting
- Record Identifier
- 9984446066002771
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