Analysis impact of firm-specific information on a company's stock Essay

Analysis impact of firm-specific instruction on a companys stock returns - Essay ExampleAccordingly, a brief literature review exit be shown which helps to underscore and elaborate upon many of the specific theoretical interpretations of the methods utilized within this physical composition. Additionally, a evidence of development of moment study is included and defined. Furthermore, the third soften of the piece give include a methodology review. The explanations of approaches which have been utilized to conduct this report will be given as easy as some assumptions and critical common factors that are associated with this methodology. Likewise, a research design and results section will comprise the quadth 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 try out period. Following this, marker models will be ch osen as the benchmark for abnormal returns. Similarly, a analog 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. Next, the cumulative abnormal return, or CAR will be utilized as a means of indicating the topic of events. A T-tests by CAR will be presented to show the significant of these events. A final part will necessarily be the conclusion of this report. It will show the basic information of this report and take up it according to the inference which has been drawn. Background information InterContinental Hotels Group (IHG) is global hotel group which operate nine hotel brands (which in turn comprise a total of 4,600 hotels in more than 100 countries and regions, more than 676,000rooms). IHG was completed in 1946 and is the worlds largest and most widely distributed network of professionally managed hotels. IHG operates in three different ways. First, IHG operates as a franchisor, second as a management accessory, and thirdly it operates as a rental basis. In addition, the dealership has been recognized as an effective business philosophy by many leaders within the industry. This report chose four specific events to explore the relationship with the IHG stock price volatility for a period time. These four events are shown below (1) 18th April 2012 IHG shows its support for small business owners, entrepreneurs and Road Warriors. (2) 7th August 2012 IHG account interim results from the 30th June 2012 and announced $1bn return of capital. (3) 8th October 2012 IHG reported the results of general meeting about particular Dividend and Share Consolidation. (4) 12th November 2012 IHG announces new Vice President of Development in Europe. Literature review good Markets Hypothesis(EMH) The Efficient Markets Hypothesis(EMH)arose in 1970 by Eugene Fama. Efficient market hypothesis was develop ed by Louis Bachelier (1900) who was from the perspective of the stochastic process. Bachelier studied the movement of Brownian motion, stock price changes, and recognized that the effectiveness of the market information, present events, and even the discounted apprize of the future events, are reflected in market prices. The efficient market theory is that the market price already contains all the available information. Based on the past information and