How to make a logit estimation

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gishena
Posts: 12
Joined: Tue Jan 19, 2016 9:55 am

How to make a logit estimation

Postby gishena » Fri Apr 22, 2016 6:38 am

Dear forum readers,

I have estimated target leverage as a fitted value from an OLS regression earlier. Now I need to make a logit regression and see whether companies that are overlevered (higher leverage than the target) or underlevered (less leverage than the target) adjust towards their target ratio when either issuing equity/debt and when repurchasing back equity/retiring debt. Companies are defined as issuing (repurchasing) a security when the net amount issued (repurchased) divided by the book value of all the assets was more than 5%. For example, a firm was defined as issuing equity when (debt issued-debt retired) / total assets > 0,05. Cases in which companies issued (repurchased) both debt and equity in a given fiscal year are omitted as they could be treated both as an equity issue (repurchase) or debt issue (retiring of debt). I need to have two seperate regressions (I already have values for the independable variables):
The first regression compares firms that raised a significant amount of common equity with firms that raised a significant amount of straight debt.
The second regression compares firms that repurchased a significant amount of common equity with firms that retired a significant amount of straight debt.

I have no idea how to make that though. I am uploading my EViews working file with all the data.

https://drive.google.com/open?id=0B7m3_ ... ExSLW1iMlk

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