Under the terms of the deal, the CEO would step down from his position immediately. In exchange, he was given a generous severance package. Given the information below, calculate the cumulative abnormal return (CAR) around this announcement. Assume the company has an expected return equal to the market return. Note: A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place
Under the terms of the deal, the CEO would step down from his position immediately. In exchange, he was given a generous severance package. Given the information below, calculate the cumulative abnormal return (CAR) around this announcement. Assume the company has an expected return equal to the market return. Note: A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
i need the answer quickly
Transcribed Image Text:Under the terms of the deal, the CEO would step down from his position immediately. In exchange, he was given a generous
severance package. Given the information below, calculate the cumulative abnormal return (CAR) around this announcement. Assume
the company has an expected return equal to the market return.
Note: A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "O" wherever required. Do
not round intermediate calculations. Round your answers to 1 decimal place.
(%)
Company
Return (%)
Market Return
Date
November 7
0.6
0.2
November 8
0.4
0.2
November 9
-0.3
-0.5
November 10
-0.6
-0.7
November 11
1.4
1.0
November 14
-0.2
1.9
November 15
0.1
0.1
November 16
0.9
0.8
November 17
0.3
0.4
November 18
-0.3
0.0
November 21
0.4
0.2
Days from
Announcement
-5
-4
-3
-2
-1
0
1
2
3
4
5
Daily Abnormal
Cumulative Abnormal
Return
Return
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 3 steps with 3 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education