Problem 14-1 Cumulative Abnormal Returns Delta, United, and American Airlines announced purchases of planes on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Delta United American Market Company Market Company Market Company Date Return Return Date Return Return Date Return Return 7/12 -.47 -.73 2/8 -.96 -1.32 10/1 .67 .35 7/13 .00 .37 2/9 -1.06 -1.32 10/2 .57 .79 7/16 1.97 2.21 2/10 .57 .33 10/3 1.27 1.27 7/17 -1.97 -1.69 2/11 .77 4.33 10/6 .27 -3.57 7/18 -2.26 1.16 2/12 -.47 -.14 10/7 -2.37 -.40 7/19 -.90 -.65 2/15 1.27 3.53 10/8 .67 .67 7/20 -.96 -1.09 2/16 .67 .67 10/9 -.47 -.34 7/23 .78 .48 2/17 -.47 -.28 10/10 .47 -.33 7/24 .27 .03 2/18 .47 .25 10/13 .00 -.27 - Given the above information, calculate the cumulative abnormal return (CAR) for these stocks as a group. All of the stocks have a beta of 1 and no other announcements are made. (A negative answer should be indicated by a minus sign. Leave no cells blank be certain to enter "O" wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Answer is not complete. Abnormal returns (R; - RM) Average Cumulative Days from announcement Delta United American Sum abnormal return abnormal return -4 -0.26 -0.36 -0.32 -0.94 -0.31✓ -0.31 -3 0.37 -0.26 0.22 0.33 0.11 -0.20✓ -2 0.24 -0.24 0.00 0.00 0.00 -0.20✓ -1 0.28 3.56 -3.84 0.00 -0.20✓ 0 3.42 0.33 1.97 1.91 1.70✓ 1 2.26 0.00 2 0.00 0.13 3 -0.30 0.19 -0.80 -0.30 4 -0.24 -0.22 -0.27 -0.24 1.97
Problem 14-1 Cumulative Abnormal Returns Delta, United, and American Airlines announced purchases of planes on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Delta United American Market Company Market Company Market Company Date Return Return Date Return Return Date Return Return 7/12 -.47 -.73 2/8 -.96 -1.32 10/1 .67 .35 7/13 .00 .37 2/9 -1.06 -1.32 10/2 .57 .79 7/16 1.97 2.21 2/10 .57 .33 10/3 1.27 1.27 7/17 -1.97 -1.69 2/11 .77 4.33 10/6 .27 -3.57 7/18 -2.26 1.16 2/12 -.47 -.14 10/7 -2.37 -.40 7/19 -.90 -.65 2/15 1.27 3.53 10/8 .67 .67 7/20 -.96 -1.09 2/16 .67 .67 10/9 -.47 -.34 7/23 .78 .48 2/17 -.47 -.28 10/10 .47 -.33 7/24 .27 .03 2/18 .47 .25 10/13 .00 -.27 - Given the above information, calculate the cumulative abnormal return (CAR) for these stocks as a group. All of the stocks have a beta of 1 and no other announcements are made. (A negative answer should be indicated by a minus sign. Leave no cells blank be certain to enter "O" wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Answer is not complete. Abnormal returns (R; - RM) Average Cumulative Days from announcement Delta United American Sum abnormal return abnormal return -4 -0.26 -0.36 -0.32 -0.94 -0.31✓ -0.31 -3 0.37 -0.26 0.22 0.33 0.11 -0.20✓ -2 0.24 -0.24 0.00 0.00 0.00 -0.20✓ -1 0.28 3.56 -3.84 0.00 -0.20✓ 0 3.42 0.33 1.97 1.91 1.70✓ 1 2.26 0.00 2 0.00 0.13 3 -0.30 0.19 -0.80 -0.30 4 -0.24 -0.22 -0.27 -0.24 1.97
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter8: Receivables
Section: Chapter Questions
Problem 8.15EX: Effect of doubtful accounts on net income During its first year of operations, Macks Plumbing Supply...
Related questions
Question
Bhupatbhai
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Recommended textbooks for you
Corporate Financial Accounting
Accounting
ISBN:
9781305653535
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Corporate Financial Accounting
Accounting
ISBN:
9781305653535
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning