Initial public offerings prospectuses were examined." In a random sample of seventy prospectuses in which earnings forecasts were disclosed, the mean debt-to-equity ratio prior to the offering issue was 3.97, and the sample standard deviation was 6. 14.

For an in- dependent random sample of fifty-one prospectuses in which earnings forecasts were not disclosed, the mean debt-to-equity ratio was 2.86, and the sample standard deviation was 4.29. Test against a two-sided alternative the null hypothesis that population mean debt- 10-equity ratios are the same for disclosers and nondisclosers of earnings forecasts.