This assignment is prepared based on a recent news article.

Plot (fictitious):

Ever since they enrolled in JMSB's EMBA program, Dale Pacioretty, Carey Subban, P.K. Weise, Max Gallagher, and Brendan Price have become very interested in business news. On September 9, 2014, these five players walked out Haps' locker room after practice on ice, and they started to chat.

1. Dale Pacioretty: Pear Inc. launched its jPhone 6 this afternoon, and I saw a lot of reactions in the stock market. See, dBay's stock fell about 6.7% shortly after Pear's presentation started. It is crazy! I understand BayBal, one of dBay's subsidiaries, will be competing with Pear on mobile payment. So, is this the reason? Can any of you explain it to me in detail? - this question relate to efficient market

2. Carey Subban: Hold on Dale. I think we need to make sure dBay's stock price decline can actually be attributed to jPhone 6. I skipped the class. My bad, my bad! But, you guys have to first help me out on this. -

3. P.K. Weise: I don't know. I have dBay's stock. Its stock price went up significantly after its last quarterly earnings announcement where the company reported a positive earnings surprise. Is this the "post- announcement drift" we learned in class? I am so confused.

4. Max Gallagher: I heard the Accounting Standards Board (AcSB) takes a position that accrual anomalies could be reduced if the accrual component of earnings is more persistent. This makes a lot of sense to me, but I don't know how to improve the persistency of the accrual component of earnings. Do you guys have any inputs? - this is expectation for this question from the prof ( if you need more information about it, please let me know - In class, we discussed two potential explanations to the low persistence of the accrual component of earnings: that is, (a) managers possibly manipulating earnings through accruals, and/or (2) errors in the process of estimating accruals (e.g., changes in trade receivables, inventories, etc.). In the assignment, Max Gallagher was asking how to improve the persistence of the accruals, and you should come up with your responses from these two aspects.

5. Brendan Price: I always have good experience with Groubon so I bought its stock early this year. Men, I lost almost 50% of my investment. Really bad! Anyway, I did some research on Groubon. In its initial IPO filings, Groubon stated that, in addition to gross profit and free cash flow, the company's performance measures also included "adjusted consolidated segment operating income" (ACSOI in short)-which excludes expenses that the company considers noncash or "otherwise not indicative of future operating expenses". Under investors' scrutiny, however, Groubon later had to strip out this controversial accounting metric in its revised IPO filings. What is wrong with "ACSOI"? I find this measure is intuitive. Why did investors oppose it?

- Requirement: Suppose you also participated in the conversation. Respond to each of these five players. Note: When applicable (for instance, in your response to Max Gallagher), you are encouraged to make hypothetical proposals. Proposals that are intuitive and with a reasonable possibility to implement will make your assignment stand out.