Original Articles

Voluntary reporting of financial targets: Motivation and share price reaction

Published in: South African Journal of Accounting Research
Volume 11, issue 1, 1997 , pages: 15–38
DOI: 10.1080/10291954.1997.11435067
Author(s): W A A MaguireDepartment of Accounting and Finance,


This paper examines the impact on share prices on the first occasion on which firms voluntarily report financial targets; specifically target rate of return, target debt-equity ratio and target dividend payout ratio. By reference to estimation risk and signalling theories, the hypothesis is that this reporting will have a positive share price impact on average. The market model and two control groups are used in this event study, which involves thirty four cases of voluntary reporting by South African firms. The results indicate a positive average share price impact. This finding may have implications for corporate financial reporting strategy.

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