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This research investigates how the issuance of SFAS No. 94 affects security markets, specifically focusing on stock returns.

Security Market Effects Associated With SFAS No. 94 Concerning Consolidation Policy.

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The article examines security market reactions to SFAS No. 94 issuance, highlighting negative stock returns.

This research investigates how the issuance of SFAS No. 94 affects security markets, specifically focusing on stock returns.
Analyzed market reactions to SFAS No. 94 release.
Compared excess stock returns before and after legislation.
Examined debt securities performance of firms pre-implementation.
Stock market responded with significant negative excess returns post-SFAS 94.
Evidence aligns with cash-flow effects hypothesis but contradicts redistribution-effects hypothesis.
No significant positive excess returns found for nonconvertible debt securities of non-consolidating firms.

Inder K. Khurana (1991) studied this question.

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