12 We winsorize ZMIJ and EL at 5 and 5 to mitigate the influence of outliers.
13 To draw a meaningful inference, we require that the firm is followed by at least four analysts for the purpose
of computing DISP. We drop 14 observations that have DISP variable greater than 1.5 as outliers. Again,
winsorizing at 1.5 does not appear to affect the empirical results.
14 Our results do not change if we include these three variables in the dispersion model.