Conditional Conservatism and the Cost of Equity Capital: Information Precision and Information Asymmetry Effects

Prior studies report negative or insignificant relations between conditional conservatism and the cost of equity capital, arguing that conservatism reduces information risk. Using accounting-based conditional conservatism proxies, however, we find a significantly positive association between conditional conservatism and the cost of equity. This positive relation operates via improving information precision about negative earnings shocks and generally inflating information asymmetry among investors, both of which increase the cost of equity. We further find that the cost of equity effect of conditional conservatism disappears in the period after the enactment of the Sarbanes-Oxley Act (SOX), consistent with the notion that nationwide improvement of information precision about negative news and diminished information asymmetry are engendered by the SOX regulation. This study adds to researches on conditional conservatism, SOX, and the cost of equity, and also has policy implications.published_or_final_versio

Conditional Conservatism and the Cost of Equity Capital: Informational, Fundamental and Behavioral Effects

Conditional conservatism (CON) is related to the cost of equity capital in a complex way, especially in imperfect markets. Prior literature suggests that CON affects the information precision and information asymmetry, resulting in either increased or decreased cost of equity. In addition, CON may influence firms’ investment decisions and exacerbate their fundamental operating risks, and investors are asymmetrically loss-averse to more bad earnings news reporting via conservative disclosure, both of which contribute to a higher equity cost. This paper empirically examines the impact of CON on the cost of equity capital through these informational, fundamental and behavioral risk effects, and detects a significantly positive association between CON and equity cost by adopting accounting-based CON proxies and equity cost measures adjusted for unexpected cash flow shocks. Using the Sarbanes-Oxley Act (SOX) as a natural experiment, we find that the positive CON-equity cost relation disappears in the post-SOX period, consistent with diminished informational, operational, and behavioral risk effects engendered by SOX regulations.postprin

General Form of the Color Potential Produced by Color Charges of the Quark

Constant electric charge $e$ satisfies the continuity equation $\partial_\mu j^{\mu}(x)= 0$ where $j^\mu(x)$ is the current density of the electron. However, the Yang-Mills color current density $j^{\mu a}(x)$ of the quark satisfies the equation $D_\mu[A] j^{\mu a}(x)= 0$ which is not a continuity equation ($\partial_\mu j^{\mu a}(x)\neq 0$) which implies that a color charge $q^a(t)$ of the quark is not constant but it is time dependent where $a=1,2,...8$ are color indices. In this paper we derive general form of color potential produced by color charges of the quark. We find that the general form of the color potential produced by the color charges of the quark at rest is given by \Phi^a(x) =A_0^a(t,{\bf x}) =\frac{q^b(t-\frac{r}{c})}{r}\[\frac{{\rm exp}[g\int dr \frac{Q(t-\frac{r}{c})}{r}] -1}{g \int dr \frac{Q(t-\frac{r}{c})}{r}}\]_{ab} where $dr$ integration is an indefinite integration, ~~ $Q_{ab}(\tau_0)=f^{abd}q^d(\tau_0)$, ~~$r=|{\vec x}-{\vec X}(\tau_0)|$, ~~$\tau_0=t-\frac{r}{c}$ is the retarded time, ~~$c$ is the speed of light, ~~${\vec X}(\tau_0)$ is the position of the quark at the retarded time and the repeated color indices $b,d$(=1,2,...8) are summed. For constant color charge $q^a$ we reproduce the Coulomb-like potential $\Phi^a(x)=\frac{q^a}{r}$ which is consistent with the Maxwell theory where constant electric charge $e$ produces the Coulomb potential $\Phi(x)=\frac{e}{r}$.Comment: Final version, two more sections added, 45 pages latex, accepted for publication in JHE

Transgenic tomato plants expressing cucumber mosaic virus coat protein and their resistance to CMV

English abstract: A chimeric gene containing a cloned cDNA of the coat protein (cp) of cucumber mosaic virus (CMV) was transferred into tomato cells, and 42 transgenic tomato plants have been produced by means of a novel leaf disk transformation with the help of a modified Ti plasmid of Agrobacterium tumefaciens. The results of DNA Southern bolt anaylsis confirmed that the CMV-cp gene was stably integrated into the genome of the transgenic plants. CMV coat protein was expressed in the plant cells tested by Western blot and Dot blot. it was shown that the transgenic plants of tomato were protected from infection by CMV. The rate of systematic infection of the virus is reduced or delayed compared with the control plants. The segregation of the R1 progeny of CMV resistance in a 3:1 ratio indicates a single insertion inherited in a Mendelian fashion

10Be和26Ai揭示的合黎山西南部侵蚀速率初步研究

地表侵蚀速率是衡量地貌演化的一个重要因子。本研究利用原地宇宙成因核素 10Be 和 26Al 对合黎山西南部地表岩石侵蚀速率进行了首次测定。结果显示：约 30 ka 以来，合黎山西南部的地表岩石侵速率约为 24 mm∙ka-1。这一结果与已见报道的其他基岩侵蚀速率值一致。这一结果与 Small et al 获得的非干旱地区的基岩侵蚀速率也基本一致，但是显著高于干旱的南极地区和半干旱的澳大利亚。10Be 和26Al 获得的侵蚀速率的良好一致性表明本研究中所用侵蚀模式的有效性。所得的侵蚀速率小于 Palumbo et al 测定的合黎山平均流域侵蚀速率（99 mm∙ka-1），原因解释尚待更多地点和样品的研究。<br style="line-height: normal; text-align: -webkit-auto; text-size-adjust: auto;" /

Prognosis, characteristics, and provision of care for patients with the unspecified heart failure electronic health record phenotype: a population-based linked cohort study of 95262 individuals

Background: Whether the accuracy of the phenotype ascribed to patients in electronic health records (EHRs) is associated with variation in prognosis and care provision is unknown. We investigated this for heart failure (HF, characterised as HF with preserved ejection fraction [HFpEF], HF with reduced ejection fraction [HFrEF] and unspecified HF). / Methods: We included individuals aged 16 years and older with a new diagnosis of HF between January 2, 1998 and February 28, 2022 from linked primary and secondary care records in the Clinical Practice Research Datalink in England. We investigated the provision of guideline-recommended diagnostic investigations and pharmacological treatments. The primary outcome was a composite of HF hospitalisation or all-cause death, and secondary outcomes were time to HF hospitalisation, all-cause death and death from cardiovascular causes. We used Kaplan–Meier curves and log rank tests to compare survival across HF phenotypes and adjusted for potential confounders in Cox proportional hazards regression analyses. / Findings: Of a cohort of 95,262 individuals, 1271 (1.3%) were recorded as having HFpEF, 10,793 (11.3%) as HFrEF and 83,198 (87.3%) as unspecified HF. Individuals recorded as unspecified HF were older with a higher prevalence of dementia. Unspecified HF, compared to patients with a recorded HF phenotype, were less likely to receive specialist assessment, echocardiography or natriuretic peptide testing in the peri-diagnostic period, or receive angiotensin-converting enzyme inhibitors, beta blockers or mineralocorticoid receptor antagonists up to 12 months after diagnosis (risk ratios compared to HFrEF, 0.64, 95% CI 0.63–0.64; 0.59, 0.58–0.60; 0.57, 0.55–0.59; respectively) and had significantly worse outcomes (adjusted hazard ratios compared to HFrEF, HF hospitalisation and death 1.66, 95% CI 1.59–1.74; all-cause mortality 2.00, 1.90–2.10; cardiovascular death 1.77, 1.65–1.90). / Interpretation: Our findings suggested that absence of specification of HF phenotype in routine EHRs is inversely associated with clinical investigations, treatments and survival, representing an actionable target to mitigate prognostic and health resource burden. / Funding: Japan Research Foundation for Healthy Aging andBritish Heart Foundation

Searching for network modules

When analyzing complex networks a key target is to uncover their modular structure, which means searching for a family of modules, namely node subsets spanning each a subnetwork more densely connected than the average. This work proposes a novel type of objective function for graph clustering, in the form of a multilinear polynomial whose coefficients are determined by network topology. It may be thought of as a potential function, to be maximized, taking its values on fuzzy clusterings or families of fuzzy subsets of nodes over which every node distributes a unit membership. When suitably parametrized, this potential is shown to attain its maximum when every node concentrates its all unit membership on some module. The output thus is a partition, while the original discrete optimization problem is turned into a continuous version allowing to conceive alternative search strategies. The instance of the problem being a pseudo-Boolean function assigning real-valued cluster scores to node subsets, modularity maximization is employed to exemplify a so-called quadratic form, in that the scores of singletons and pairs also fully determine the scores of larger clusters, while the resulting multilinear polynomial potential function has degree 2. After considering further quadratic instances, different from modularity and obtained by interpreting network topology in alternative manners, a greedy local-search strategy for the continuous framework is analytically compared with an existing greedy agglomerative procedure for the discrete case. Overlapping is finally discussed in terms of multiple runs, i.e. several local searches with different initializations.Comment: 10 page

Growth factor restriction impedes progression of wound healing following cataract surgery: identification of VEGF as a putative therapeutic target

Secondary visual loss occurs in millions of patients due to a wound-healing response, known as posterior capsule opacification (PCO), following cataract surgery. An intraocular lens (IOL) is implanted into residual lens tissue, known as the capsular bag, following cataract removal. Standard IOLs allow the anterior and posterior capsules to become physically connected. This places pressure on the IOL and improves contact with the underlying posterior capsule. New open bag IOL designs separate the anterior capsule and posterior capsules and further reduce PCO incidence. It is hypothesised that this results from reduced cytokine availability due to greater irrigation of the bag. We therefore explored the role of growth factor restriction on PCO using human lens cell and tissue culture models. We demonstrate that cytokine dilution, by increasing medium volume, significantly reduced cell coverage in both closed and open capsular bag models. This coincided with reduced cell density and myofibroblast formation. A screen of 27 cytokines identified nine candidates whose expression profile correlated with growth. In particular, VEGF was found to regulate cell survival, growth and myofibroblast formation. VEGF provides a therapeutic target to further manage PCO development and will yield best results when used in conjunction with open bag IOL designs