On November 14, Thorogood Enterprises announced that the public and acrimonious battle with its current CEO had been resolved. 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. Graph and interpret your results. Do your results support marketefficiency?

Transcribed Image Text:

Market Return (%) 0.5 0.3 -0.2 -0.6 1.3 Company Return (%) 0.4 0.4 -0.3 0.5 1.1 1.8 0.1 0.7 0.3 0.0 0.2 Date 11/8 11/9 -0.1 0.1 0.9 0.2 -0.2 0.3