Prior studies have documented that the earnings response coefficient is positively related to persistence and growth and negatively related to beta and the risk-free rate. Although these studies provide interesting tests of economic theories, they do not provide a current measure of persistence. A current measure of persistence is useful for investors to assess the information content in current earnings innovations. We provide evidence that indicates a statistically significant positive relation between the earnings response coefficient and Tobin's q, thus suggesting that a firm's q ratio is a current proxy for persistence.
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