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This paper adds to finance pedagogy related to the wealth accumulation stage of retirement planning using techniques that rely heavily on understanding the time value of money (TVM) concepts.

We provide a step-by-step explanation of a retirement wealth accumulation model, accompanied by a detailed numerical example ready for use in the classroom.

We present a systematic approach to estimate the retirement nest egg and the target return required to achieve the nest egg. The estimated target return is suggested as a primary determinant of an investor’s asset allocation for retirement wealth accumulation. Our approach directly links the estimated nest egg with a target return estimation and asset allocation decisions.

This paper contributes to retirement planning pedagogy by employing a unique model that applies TVM concepts relevant to the wealth accumulation stage.

The authors investigate how the stock market reacts to financial restatements using the restatements data from the United States Government Accountability Office (GAO-06-678). In particular, the purpose of this paper is to examine the long-run equity performance of the restating firms, for holding periods of one to five years after the announcements of restatements.

This paper measures the long-run stock performance of restating firms with the buy-and-hold abnormal returns and time-series regression analyses based on Fama–French’s (1993) three-factor model and Carhart’s (1997) four-factor model.

The authors find that restating firms significantly underperform in the long run compared with their peers matched by industry, size and book-to-market. Restating firms’ underperformance is confirmed with time-series regression analyses based on Fama–French’s (1993) three-factor model and Carhart’s (1997) four-factor model. Further, the authors find the negative long-run abnormal performance of restating firms is primarily driven by large firms. The authors also report that self-prompted restatements and improper revenue accounting-triggered restatements result in worse long-run abnormal performance.

This paper is the first paper that thoroughly investigates the long-run stock returns of the firms that restate financial statements by fully considering the size effect.

The purpose of this paper is to examine the practices of professors teaching the introductory class in investments.

A sample of 101 syllabi of the first investments course taught in various AACSB accredited business schools around the country was collected. Several dimensions of course content are summarized: the primary textbook selections, other required and recommended materials including the use of spreadsheets, financial calculators, financial magazines such as the Wall Street Journal (WSJ), and/or stock market games, grading policies including assessment components and their weights, and course contents based on various investments topics.

Classroom practices of investments professors differ considerably. There is virtually nothing that is universally applied by investments faculty. There are, however, many areas such as key content to include in the course where a large majority tends to agree with each other.

While there is obviously not a single right way to teach investments, many professors may be able to improve their classes or their assessment methods by trying some of the things that others are doing. Including stock market games, for example, might enlighten the students and encourage more classroom discussion.

Aims to test to determine whether the selection of the historical return time interval (monthly, quarterly, semiannual, or annual) used for calculating real estate investment trust (REIT) returns has a significant effect on optimal portfolio allocations.

Using a mean‐variance utility function, optimal allocations to portfolios of stocks, bonds, bills, and REITs across different levels of assumed investor risk aversion are calculated. The average historical returns, standard deviations, and correlations (assuming different time intervals) of the various asset classes are used as mean‐variance inputs. Results are also compared using more recent data, since 1988, with, data from the full REIT history, which goes back to 1972.

Using the more recent REIT datarather than the full dataset results in optimal allocations to REITs that are considerably higher. Likewise, using monthly and quarterly returns tends to understate the variability of REITs and leads to higher portfolio allocations.

The results of this study are based on the limited historical return data that are currently available for REITs. The results of future time periods may not prove to be consistent with the findings.

Numerous research papers arbitrarily decide to employ monthly or quarterly returns in their analyses to increase the number of REIT observations they have available. These shorter interval returns are generally annualized. This paper addresses the consequences of those decisions.

It has been shown that the decision to use return estimation intervals shorter than a year does have dramatic consequences on the results obtained and, therefore, must be carefully considered and justified.

This paper aims to contribute to the existing finance literature on capital structure by examining the long‐run equity performance of the firms that employ extremely conservative debt policy – zero leverage for three or five consecutive years.

This paper measures the long‐run equity performance of zero‐debt firms with two commonly used methods: the buy‐and‐hold abnormal returns following Barber and Lyon, and the Fama and French three‐factor models. The four‐factor models are also used to check the robustness of the result.

The authors find that zero‐debt firms perform better over the long run based on the calendar‐time portfolio regressions after adjusting for Fama‐French factors. The results indicate that the persistent lack of debt in the capital structure seems an important determinant of stock returns, and the impact of extreme conservatism in debt policy is not fully captured by the theoretical and empirical risk proxies, such as beta, size, book‐to‐market, and momentum.

The benefit of the present article for investors and portfolio managers is the identification of an additional important determinant of stock returns.

This paper is the first article that thoroughly investigates the long‐run stock returns of the firms that choose to stay debt free over an extended period of time.