On February 25, 2014, company A announced the acquisition of company B for a total of $16
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Question:
A1: Calculate the beta of firm A.
A2: Calculate the abnormal return (AR) for Company A on February 25 2014.
A3: Calculate the Cumulative abnormal return (CAR) for company A starting: (i) 3 days before the announcement and considering the 3 days after the announcement: CAR(- 3,3); (ii) 1 day before and 1 day after the announcement CAR(-1,1). Please consider only the days listed below and do not take into account if one or more days in the event window are missing.
A4: Critically discuss your results and the problem of information leakage in event studies.
Related Book For
Intermediate Accounting 2014 FASB Update
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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