Premium Essay

Event Study of 3 Listed Companies

In: Business and Management

Submitted By MrMitz
Words 3303
Pages 14
FIN 922 – Investment Management

In this report we shall discuss three companies which are listed in various exchanges in the U.S and conduct an event study and make a consensus on their responsiveness to an Earnings Surprise. We also need to establish a relationship between the Market Index and the Stock in itself. This relationship can be determined by running a regression and using the Market as the independent variable and the Stock as the dependent variable.
In order to analyze the responsiveness of a stock, we need to understand and imply the concept of the beta.
The beta is a measure of the volatility, or systematic risk, or a portfolio in comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM), a model that calculates the expected return of an asset based on its beta and expected market returns.
Beta is calculated using regression analysis and you can think of beta as the tendency of a security’s returns to respond to swings in the market. A beta of less than 1 means that the security will be less volatile than the market.
Now, we are going to conduct an event study for 3 companies. 1.) Parker Drilling 2.) Autobytel Inc. 3.) Auxilium Pharmaceuticals, Inc.

1. Parker Drilling Company

Introduction
Parker Drilling is part of the Oil & Gas Equipment & Services industry. The company was founded in 1934 and is headquartered in Houston, Texas.
Parker Drilling specializes in barge drilling, onshore drilling and various tools that are required by drillers. Parker does not venture way into the ocean and drill mines in the confines of the earth’s surface but rather resorts to the shores. Most of the company’s operations are off the coast of Louisiana in the Gulf of Mexico. The second part of their business is selling tools which are required for drilling operations.
Their 4 intermediate barge rigs…...

Similar Documents

Premium Essay

Research on Earnings Management in Listed Companies

...Research on Earnings Management in Listed Companies Name: Jing LI Table of Contents 1.Overview of earnings management theories 3 2.Motivations for earnings management in listed companies 7 3. Means to do earnings management 12 4.Conclusion 17 1.Overview of earnings management theories 1.1 Meaning of Earnings Management To research on earnings management, we must understand the meaning of earnings management. In financial accounting theory, different researchers have different understandings of the meaning of the earnings management. First, researchers mainly hold three opinions: First one is that earnings management is due to a keen interest of managers on the choice of accounting policies. Mangers will choose those accounting policies that maximize their own utility or market value of the company. Meanwhile, the accounting policy will not exceed the scope of the accounting standards. The second one is based on the information concept. In this view, earnings management is the concept of a "disclosure management", or to say that the management of the company (including the board of directors, managers, department heads) for certain private interests to control financial statements when disclosing. The third one is from the objectives of standard-setters. Earnings management is that the authorities use professional judgment to prepare financial statements and through the planning transaction to mislead the......

Words: 4264 - Pages: 18

Free Essay

Ceo Remuneration in Listed European Insurance Companies

...EO r emuneration in l isted E ur ope an insurance companies Trends and justifications over the years 2005-2009 Authors: Sara Palmén Jönköping International Business School Avare Suleyman Jönköping International Business School Tutor: Dr. Petra Inwinkl Associate Professor in Accounting and Finance, Jönköping International Business School Master thesis within Business Administration Title: CEO remuneration in listed European insurance companies – Trends and justifications over the years 2005-2009 Authors: Sara Palmén, Avare Suleyman Tutor: Dr. Petra Inwinkl Examiners: Dr. Petra Inwinkl, Prof. Gary Cunningham Date: Spring 2010 (uploaded 2010.06.03) Key words: CEO, chief executive officer, remuneration, fixed pay, variable pay, short-term, long-term, benefit, Europe, insurance, incentive, attraction, retention, agency theory, financial crisis, trend, justification. Abstract In the ever so increasingly competitive business climate of the 21st century, human resources are vital for corporate success. Employees need proper incentives to perform in goal-oriented manners. Incentive systems, especially Chief Executive Officer [CEO] remunerations, have been a popular topic since the 1990s, and this tendency has increased both during the 2002-2003 corporate scandal era, as well as the financial crisis which sparked in 2007. The recent tendency appears to lean towards companies cutting their executive bonuses as well as......

Words: 23597 - Pages: 95

Premium Essay

Procedures on the Administration of Information Disclosure of Listed Companies

...the Administration of Information Disclosure of Listed Companies China Securities Regulatory Commission 01-30-2007 Order of the China Securities Regulatory Commission [2007] No. 40 The Procedures on the Administration of Information Disclosure of Listed Companies deliberated and adopted at the 196th Chairman Working Meeting of the China Securities Regulatory Commission are hereby promulgated and shall be effective as of the date of promulgation. Appendix: Procedures on the Administration of Information Disclosure of Listed Companies Chapter 1: General Provisions Article 1: These Procedures are formulated in accordance with the Company Law, the Securities Law and other laws and administrative regulations in order to regulate information disclosure of issuers, listed companies and other persons with information disclosure obligations, to strengthen the administration of information disclosure affairs and to protect the lawful rights and interests of investors. Article 2: Persons with information disclosure obligations shall disclose information truthfully, accurately, completely and timely and there shall be no falsehood, misleading representation or major omission. Persons with information disclosure obligations shall make public information disclosure to all investors at the same time. Where companies that issue and list securities and their......

Words: 6439 - Pages: 26

Premium Essay

Case Study Carlson Companies

...Case Study 3: Carlson Companies Cicely Jenkins Dr. Stephen Huber CIS505: Communication Technologies November 24, 2013 Carlson Companies Carlson Companies, a private company known for its existence in marketing, business, leisure travel, and the hospitality industries, has over 180,000 employees across the United States. Carlson Shared Services, the Information Technology (IT) division, provides services to its internal clients and thus must support a wide range of applications and services. In 2002, the IT division decided to implement a storage area network (SAN) that in turn would meet the six (6) goals established in order to meet the needs of a growing company. In this paper we will take an in depth look at Carlson’s implementation of the SAN by 1) assessing how the Carlson SAN approach would be implemented in today’s environment; 2) comparing the pros and cons of consolidating data on a SAN central data facility versus the dispersed arrangement it replaces; 3) evaluating the issues raised from the Carlson SAN mixture of equipment from a number of vendors and determine the management options for dealing with this type of situation; 4) justifying the reduction of administration and management of storage networking through Carlson’s IP SAN; and 5) assessing how cloud computing could be used by Carlson instead of a SAN. Carlson SAN Approach The Carlson SAN approach in today’s environment can be assessed by the preparation, impact and benefits obtained by Carlson...

Words: 1473 - Pages: 6

Premium Essay

Far 3 Reconstruction Event

...Reconstruction Events Restructuring is a significant modification made to the debt, operations or structure of a company. This type of corporate action is usually made when there are significant problems in a company, which are causing some form of financial harm and putting the overall business in jeopardy. The hope is that through restructuring, a company can eliminate financial harm and improve the business The company have been undergoing recon structuring because the company suffered huge loss from credit crisis in the US. In order to keep the company continuous their operations, the company need to experience internal recon structuring, The company proposed share capital reduction pursuant to the Companies Act, 1965 involving the reduction of the par value of each existing ordinary share of PMI in issue from RM0.50 to RM0.05 via the cancellation of RM0.45 of the par value of each existing ordinary share of RM0.50 each ("Proposed Par Value Reduction"). The company also proposed reduction of the share premium account of PMI of up to RM224.007 million ("Proposed Share Premium Reduction"). The company proposed consolidation of two (2) ordinary shares of RM0.05 each in PMI (after the Proposed Par Value Reduction) into one (1) ordinary share of RM0.10 in PMI each resulting in the revision of PMI’s issued and paid-up share capital from 2,479,324,224 ordinary shares of RM0.05 each in PMI amounting to RM123,966,211 (after the Proposed Par Value Reduction) to 1,239,662,112......

Words: 1056 - Pages: 5

Premium Essay

A Case Study of Abc Company

...A Case Study of ABC Company COMM/215 Essentials of College Writing 8 May 2014 A Case Study of ABC Company What follows below is an analysis of the ABC Company’s hiring and training practices. In reviewing the events as described, many issues have surfaced regarding the assigned recruiter, Carl Robins and the human resources and training practices of the ABC Company. There are numerous examples of disorganization, lack of following through and areas of overlapping responsibilities, requiring a possible reorganization of the business itself. Although the Case Study does not specify, for the purposes of analysis it is assumed that there are separate Human Resources and Training Departments within the company, for, in today's business world, it would be difficult to imagine a company structure that did not include these two key departments. Initially, there appears to be a definite lack of coordination, planning and follow-through of the newly hired recruiter, Carl Robins. There are many incidents that demonstrate his lack of follow-through in the entire hiring and training processes. Many questions arise that deserve to be asked and examined. For example, 1) Why did he not immediately follow-through with the newly hired employees to ensure all required paperwork was properly and timely completed? 2) Did he assume that the Human Resource Department or Monica, the Operations Supervisor would follow-through with the scheduling of drug testing, physicals, etc. of......

Words: 1291 - Pages: 6

Premium Essay

Event Study Analysis

...Event Study Analysis: CLM Chapter 4 Definition: An event study attempts to measure the valuation effects of a corporate event, such as a merger or earnings announcement, by examining the response of the stockprice around the announcement of the event. One underlying assumption is that the market processes information about the event in an efficient and unbiased manner (more on this later). Event Study Analysis The steps for an event study are as follows: – – – – – – – Event Definition Selection Criteria Normal and Abnormal Return Measurement Estimation Procedure Testing Procedure Empirical Results Interpretation Event Study Analysis The time line for a typical event study is shown below in event time: T0 T1 0 T2 T3 The interval T0-T1is the estimation period The interval T1-T2 is the event window Time 0 is the event date in calendar time The interval T2-T3 is the post-event window There is often a gap between the estimation and event periods Models for measuring normal performance In an event study we wish to calculate the abnormal performance associated with an event. To do so, we need a model for normal returns. – For example: Suppose a firm announces earnings and the stock price rises by 3%, but the market also went up 2% that day. How much of the 3% rise should be attributed to the announcement of earnings. • Fortunately, over short event windows (one or two days) the choice of normal return models usually has little effect on the......

Words: 2419 - Pages: 10

Premium Essay

Enron Company Case Study

...Corporation, an American energy company based in Houston, Texas, and the dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time, Enron undoubtedly is the biggest audit failure. It is ever the most famous company in the world, but it also is one of companies which fell down too fast. In this paper, it analysis the reason for this event in detail including the management, conflict of interest and accounting fraud. Meanwhile, it makes analysis the moral responsibility From Individuals’ Angle and Corporation’s Angle. Keywords: Enron scandal, Accounting fraud, Moral responsibility, Analysis 1. Review of Enron’s Rise and Fall Throughout the late 1990s, Enron was almost universally considered one of the country's most innovative companies -- a new-economy maverick that forsook musty, old industries with their cumbersome hard assets in favor of the freewheeling world of e-commerce. The company continued to build power plants and operate gas lines, but it became better known for its unique trading businesses. Besides buying and selling gas and electricity futures, it created whole new markets for such oddball "commodities" as broadcast time for advertisers, weather futures, and Internet bandwidth. Enron was founded in 1985, and as one of the world's leading electricity, natural gas, communications and pulp and paper companies before it......

Words: 3062 - Pages: 13

Premium Essay

Term Report in Listed Company-Yahoo

...Term Reports on Listed Company NAME: TIAN YU Content I. Introduction II. History and background on the company III. Financial analysis IV. Financial reports V. Current value of common shares VI. Summary and conclusions VII. Appendix I (Include footnotes giving sources of quoted and paraphrased material) VIII. Appendix II (Include appendices, if needed, containing correspondence or other supporting schedules and documents, including the financial statements) IX. References (Include appendices, if needed, containing correspondence or other supporting schedules and documents, including the financial statements) I. Introduction Yahoo! Inc. is a main player of internet information provider industry. Based on their I good operation performance in recent few years, more and more investor are re-purchasing their stocks. II. History and background on the company The US Public company, Yahoo! Inc. (Yahoo!), found in 1994 has been one of the largest technology company in the world. At the begining, the founders of the company create a website named “jerry and David’s Guild to the World Wide Web”, a simple directory of websites to help people navigate the Internet. In march 1994, that website name was renamed “Yahoo”. The “Yahoo.com” domain was incorporated in 1995 and is a Delaware corporation. Yahoo grew rapidly throughout the 1990s. As other companies of search engines and web directors, Yahoo added a web portal. At the year of 1998, Yahoo was......

Words: 3942 - Pages: 16

Free Essay

Listed Companies

...388.70 | 49305.72 | 500182 | HERO MOTOCORP LTD. | 2410.15 | 48127.68 | 500096 | DABUR INDIA LTD. | 273.05 | 47961.56 | 500550 | SIEMENS LTD. | 1326.75 | 47248.21 | 532187 | INDUSIND BANK LTD. | 875.85 | 46378.58 | 517334 | MOTHERSON SUMI SYSTEMS LTD. | 519.10 | 45775.11 | 532792 | CAIRN INDIA LTD. | 230.30 | 43177.86 | | 41548.01 | 532424 | GODREJ CONSUMER PRODUCTS LTD. | 1170.75 | 39857.82 | 532134 | BANK OF BARODA | 177.55 | 39265.11 | 524804 | AUROBINDO PHARMA LTD. | 1334.75 | 38972.33 | 500425 | AMBUJA CEMENTS LTD. | 246.80 | 38266.35 | 532810 | POWER FINANCE CORPORATION LTD. | 278.35 | 36743.33 | 532321 | CADILA HEALTHCARE LTD. | 1739.30 | 35611.91 | 500114 | Titan Company Limited | 394.65 | 35036.48 | 500387 | SHREE CEMENT LTD. | 10016.95 | 34896.27 | 532648 | YES BANK LTD. | 810.25 | 33847.07 | 500470 | TATA STEEL LTD. | 345.85 | 33589.48 | 500300 | GRASIM INDUSTRIES LTD. | 3650.95 | 33534.77 | 531344 | CONTAINER CORPORATION OF INDIA LTD. | 1674.80 | 32654.28 | 532955 | RURAL ELECTRIFICATION CORPORATION LTD. | 330.15 | 32600.96 | 505537 | ZEE ENTERTAINMENT ENTERPRISES LTD. | 336.30 | 32299.89 | 500113 | STEEL AUTHORITY OF INDIA LTD. | 77.20 | 31884.15 | 533106 | OIL INDIA LTD. | 518.85 | 31189.94 | 532478 | UNITED BREWERIES LTD.-$ | 1162.90 | 30747.67 | 500331 | PIDILITE INDUSTRIES LTD. | 591.60 | 30329.13 | 532461 | PUNJAB NATIONAL BANK |......

Words: 2074 - Pages: 9

Premium Essay

Event Study of Stock Splits

...EVENT STUDY OF STOCK SPLITS Final Project Report of Investment Banking & Financial Services (IBFS) February 2016 Submitted to: Prof. A.K. Mishra Submitted by: Group 3, Section A DHEERAJ MADAAN(Mob- +91 7523849812) | PGP30193 | HARI SINGH CHOUDHARY | PGP30198 | RITIN KAKKAR | PGP30390 | ROHAN SARAF | PGP30219 | SAKSHI SONI | PGP30392 | | | Indian Institute of Management, Lucknow Contents Data 3 Sample 3 Methodology 4 Alpha and Beta Estimation 4 Event Study 4 Hypothesis & Objective 5 Testing & Results 5 Alpha and Beta calculation 5 Event Study 6 Stock Split 7 Reverse Stock Split 8 Conclusion 8 Data 1. This study includes samples of 19 companies that made a stock split announcements and 9 companies that made a reverse stock split announcements. All the companies were listed on BSE. 2. Data for daily stock prices and closing BSE 500 index for this study was collected from http://finance.yahoo.com/. Sample The below tables show the sample companies selected for the event study. Companies selected for stock Split announcements Companies selected for reverse stock split announcements Methodology The event period was decided as -60 to 60 with the announcement date falling on day 0. Alpha and Beta Estimation 1. Alpha and beta was estimated for each company by regressing daily stock returns with index return. 2. The estimation was a done for a 250 day period prior to -60. This period......

Words: 932 - Pages: 4

Premium Essay

Determinants of Capital Structure for Listed Industrial Product Companies in Malaysia

...1 CHAPTER ONE INTRODUCTION 1.1 Background of the Study Financial strategy is the largest corporate financial decisions that are made by the financial management committee and it is the most crucial for all organization or company for their strategy to make profit to their firms. Financial strategy also will influence the capital structure. The theory of Capital structure is closely related to the firm’s cost of capital. It is one of the effective tools of management to manage the cost of capital. Capital structure is the mix of the long-term sources of funds used by the firm. The primary objective of capital structure decisions is to maximize the market value of the firm or achieving the maximization of shareholders wealth through an appropriate mix of long-term sources of funds and an optimal capital structure is reached at a point where the cost of the capital is minimum. To design the capital structure, the element that should consider is first, the wealth maximization is attained and second, is the best approximation to the optimal capital structure. In finance, capital structure refers to the way a corporation finances its assets through some combination of equity, debt, or hybrid securities (Saad, 2010). In short, capital structure is a mixture of a company's debts (long-term and short-term), common equity and preferred equity in financing its assets. Capital structure is essential on how a firm finances its overall operations and growth......

Words: 10584 - Pages: 43

Premium Essay

How May the Company Secretary Add Value to the Governance Framework of a Listed Company?

...The roles of company secretary has been transformed from the traditional role of preparing the minutes of meeting to a more proactive and strategic role. They are consulted by the boards on procedural and regulatory requirements and sometimes they are required to provide induction to new directors, assistance to chairperson in determine annual board plan and administration of other strategic issues. Based on above statement prove that there is an increasing recognition of the need to elevate the position and function of company secretaries to allow them take on a stronger role in promoting governance within companies. (Corporate Governance Blueprint 2011 Pg 67) The position of company secretary will enable them to have a holistic view of the governance framework which results that tasked with responsibility of ensuring the framework and any supporting policies and procedures are clearly documented. E.g. requirements of formal documentation under the Code such as schedule of matters reserved for the Board is in place. (Deloitte: The Changing Role of the Company Secretary Focus on Governance, http://www2.deloitte.com/ie/en/pages/legal/articles/changing-role-secretary.html) Besides that, company secretary shall play a leading role in good governance by helping the Board and the committee function effectively and in accordance with the Term of Reference and Best Practice. E.g. supports which beyond scheduling meetings to proactively managing the agenda and ensuring the......

Words: 526 - Pages: 3

Premium Essay

Marketing Plan for a Online Event Ticketing Company

...TIX4U.COM Marketing Plan Version 1.0 19/04/2012 Presented by: Mohammad Khamis Our Mission To exceed our client’s expectations through professional customer service, in depth event knowledge, outstanding seating selections and a passion for building relationships that last a lifetime. Our Vision To run an online ticket exchange and brokerage company that is more responsive to customer needs by offering clients cutting edge online tools. Plan Overview  1 Year Tactical Plan  Plan A: Analyzing and improving, where necessary, Tix4u.com’s web presence. With fast evolution of web designs, applications, and delivery, it is important to perform analysis in several areas to make sure Tix4u.com use of web-technologies matches and exceeds the expectations of our current and future clients.  Plan B: Enabling identity management portal.Identity management is simply one login account; one user name for email, files, Banner, WebCT, and every other information technology resource. Currently users have different login accounts for these resources. With the completion of the identity management project every user will login to each resource with the same user name and password.  3 Year Strategic Goals  Plan A: The Information Technology Services Client Services and Help Desk are an integral part of providing a top notch user experience. In addition to phone support, Information Technology Services is planning to offer web-based FAQs, online documentation,......

Words: 775 - Pages: 4

Free Essay

Company Study

...ORGANISATIONS- THEORY AND PRACTICE PROJECT – WORKSHEET 1 group- L2 Name of the Adopted Company : United Spirits Limited The business the company is into: United Spirits Limited is the largest spirits company in the world by volume. United Spirits Limited (USL) is involved in the production, distribution and sale of alcohol beverages across different regions in India. It is also involved in the exports of alcohol beverages to over 37 countries thus enjoying a global footprint as well. Besides Whyte & Mackay and Bouvet Ladubay being 100% subsidiaries of USL, the company has 22 millionaire brands (selling more than a million cases a year) in its portfolio and enjoys a strong 59% market share for its first line brands in India. Its brands include Dalmore, Black Dog Reserve Scotch Whisky(Scotch); Antiquity Blue, Signature(Indian whisky); Honey Bee(Brandy); Blue Ribbon( Gin); Romanov(vodka)etc. A brief introduction to the History of the company: The company was established in 1826 by McDowell & Co as a trading company with its headquarters in Madras, by an enterprising Scotsman Angus McDowell. McDowell’s rapidly became the preferred purveyors of fine imported liquors and cigars that gratified the rich souls in the British India. In 1951, Vittal Mallya acquired McDowell’s initiating a new era in the history of the company. Its first distillery was established in Cherthala in 1959 in Kerala and began bottling brandy. Its first product was launched in 1962......

Words: 3049 - Pages: 13