Hi all,
I'm currently doing a event study to estimate the impact of dividend initiation of a firms growth both in terms of revenues and earnings. I am however having some issues when it comes to proxy the market. I'll start by listing my selection criteria for the firms I'm using :
1. Positive EBITDA during estimation period
2. Postive Revenues
3. Book Value of $250.000+
4. US Based
5. Non financial or utility firms
6. Don't pay dividends during estimation period, pay during event window
Now I have been told to use a established method and minimize any bias that might occur , the best way to do this is to find similar studies and use their method. I however cannot find any similar study that explains how they represent the market, and the studies I'm basing this on / trying to compare to use different methods (not event studies). Anyway I've been using Capital IQ to get my data and thought that I could just screen for a criteria that fits my "market" and aggregate the results. But I'm unsure just how , if at all, the market should relate to my firms.
So my ideas on the market (have collected this data in variations, unsure which to use if any)
1. US Based definitely
2. Non financial or utility definitely
3. Positive revenues needed ? I assumed it to be so.
4. Positive EBITDA needed ?
5. Book Value of $250.000+ needed ?
6. My original idea was to compare my dividend initiating firms to firms who do not initiate dividend payments (basically firms in the very same group as the firms being examined) , so maybe have "do not pay div" ?
Hope this post does not sound too confusing. I'm just trying to know how these things are usually done , so any answer is appreciated.
Regards
Haukur
I'm currently doing a event study to estimate the impact of dividend initiation of a firms growth both in terms of revenues and earnings. I am however having some issues when it comes to proxy the market. I'll start by listing my selection criteria for the firms I'm using :
1. Positive EBITDA during estimation period
2. Postive Revenues
3. Book Value of $250.000+
4. US Based
5. Non financial or utility firms
6. Don't pay dividends during estimation period, pay during event window
Now I have been told to use a established method and minimize any bias that might occur , the best way to do this is to find similar studies and use their method. I however cannot find any similar study that explains how they represent the market, and the studies I'm basing this on / trying to compare to use different methods (not event studies). Anyway I've been using Capital IQ to get my data and thought that I could just screen for a criteria that fits my "market" and aggregate the results. But I'm unsure just how , if at all, the market should relate to my firms.
So my ideas on the market (have collected this data in variations, unsure which to use if any)
1. US Based definitely
2. Non financial or utility definitely
3. Positive revenues needed ? I assumed it to be so.
4. Positive EBITDA needed ?
5. Book Value of $250.000+ needed ?
6. My original idea was to compare my dividend initiating firms to firms who do not initiate dividend payments (basically firms in the very same group as the firms being examined) , so maybe have "do not pay div" ?
Hope this post does not sound too confusing. I'm just trying to know how these things are usually done , so any answer is appreciated.
Regards
Haukur