Cumulative Abnormal Returns $($LO$2,$ CFA$2)$ On November $14,$ Thorogood Enterprises

Page $248$

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

market efficiency?