Future earnings response coefficient
Lastly, we find that real earnings management prevents the market from assessing firms’ future earnings reflected in the current stock prices. KEY WORDS: Cash flow persistence, earnings persistence, earnings quality, future earnings response coefficient, This study is aimed to examine the effect of income smoothing, dividend policy, leverage and firm size on earnings response coefficient and future earnings response coefficient.The population used in this study are all non: financial companies listed in Indonesia Stock Exchange. from 2007 until 2013. The main data used in this research is the data in 2011 and 2012. 4.2. Future earnings response coefficient model. This study employs the future earnings response coefficient (FERC) model, developed by Collins et al. (1994) and modified by Lundholm and Myers (2002), to examine the impact of product market power and long-term investment on the extent to which stock prices reflect information about future