Research Design

E. Research Design

1. Interest Variables

In this study there are three types of variables, the dependent variable in the form of stock prices, the independent variables in the form of net book value of In this study there are three types of variables, the dependent variable in the form of stock prices, the independent variables in the form of net book value of

publication of financial statements in organized stock market or the newspaper, where the faster. The stock price is measured by the market price per share.

(2). Book Value of Equity. This study uses the net book value of equity, i.e. the end of the book value of equity (NBE) minus current year's net income (LB) and dirty surplus items (OCI). Net book value of equity per share, i.e. the net book value of equity divided by shares outstanding at the end of year (SHM) is calculated as follows:

NBE  LB  OCI NBEn  (SHM )

(3). Net Income. Net income is earning after tax and declared per share (EPS), the net income after tax (LB) divided by average shares outstanding (SHMb) is calculated as follows:

LB EPS  (SHMb )

(4). Other Comprehensive Income (OCI). OCI is dirty surplus item that quoted from the book value of equity. Dirty surplus item is measured by a dummy. Figure 1 represents the company reported a dirty surplus and 0 otherwise.

(5). Current Operating Asset Growth. Growth in current operating asset is measured from changes in current operating asset value per share. Change in current operating asset is measured per share (ALOPS) that is calculated from (5). Current Operating Asset Growth. Growth in current operating asset is measured from changes in current operating asset value per share. Change in current operating asset is measured per share (ALOPS) that is calculated from

(6). Growth of Fixed Asset. The growth of tangible fixed asset per share (INV) is obtained by the historical cost of fixed asset (AT) at the end of the year per share minus it of fixed asset per share beginning of the year, calculated as follows:

(7). Intangible asset. Intangible asset is expenditure that makes up the cost and

has the potential economic value to generate revenue. Intangible asset is measured with a dummy, figure 1 represents a company that has intangible asset and 0 otherwise.

(8). Conservatism. Conservatism is a measurement of the difference between the

book value of asset to its economic value. To measure conservatism, this study uses the negative non-operating accruals (NNA) per share, calculated by equation 4.

2. Technical Analysis

Statistical equation to test the hypotheses is as follows: HSu it = α + β 1 NBEn it + β 2 EPS it + β 3 DAKOT it + β 4 ALOPS it + β 5 INV it +

β 6 DATW it + β 7 Cn it + β 8 Cn it *NBEn it + β 9 Cn it EPS it + β 10 Cn it *DAKOT it + β 11 Cn it *ALOPS it + β 12 Cn it *INV it + β 13 Cn it *DATW it + ε it …................(5)

In this case, HSu it = stock price of firm i on the day of publication of financial statements fastest

in the organized stock market or a newspaper. NBEn it = net book value of equity of firm i on date t (the year ended) EPS it = net income of firm i period t DAKOT it = dirty surplus items of firm i at the year ended (dummy). ALOPS it = Growth in current operating asset per share of firm i period t. INV it = Growth of fixed asset per share of firm i period t. DATW it = intangible asset of firm i on date t (dummy). Cn it = Conservatism firm i in period t.

α = constant/intercept β1: … β 13 = slope/coefficient ε it = residual error.