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Analysis impact of firm-specific information on a company's stock returns. - Essay Example
Pages 18 (4518 words)
Introduction The relationship between special information, event announcement, and stock return behavior is concerned with an increasing number of investors, portfolio managers, regulators and researchers. This report is directed towards helping to examine the InterContinental Hotels Group (IHG) stock price reaction with disclosure of company specific events…
Accordingly, a brief literature review will be shown which helps to underscore and elaborate upon many of the specific theoretical interpretations of the methods utilized within this report. Additionally, a demonstration of development of event study is included and defined. Furthermore, the third part of the piece will include a methodology review. The explanations of approaches which have been utilized to conduct this report will be given as well as some assumptions and critical common factors that are associated with this methodology. Likewise, a research design and results section will comprise the fourth part of this analysis. Ultimately, the issues which will be explored will be analyzed based upon an event study method. This part will begin with defining the date of events and then choose the estimated period and test period. Following this, marker models will be chosen as the benchmark for abnormal returns. Similarly, a linear regression for the market will be chosen. At this time, ordinary least square assumptions will be necessary to estimate the stability. Based on the results of linear regression, the abnormal return will be calculated. ...
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