Question
On May 5, 2020, Alexion Pharmaceuticals announced its acquisition of Portola Pharmaceuticals for $1.4 billion. On the same day, Alexion, Portola, and the S&P 500
On May 5, 2020, Alexion Pharmaceuticals announced its acquisition of Portola Pharmaceuticals for $1.4 billion. On the same day, Alexion, Portola, and the S&P 500 index closed at $98.25, $17.85, and 2,868.44, respectively. Closing prices on May 4, 2020 were $103.84 for Alexion, $7.76 for Portola, and 2,842.74 for the S&P 500 index.
What is the announcement day abnormal return for Portola assuming its beta is 2.31? Please do not round numbers in intermediate steps.
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Financial Accounting Theory
Authors: William R. Scott
7th edition
132984660, 978-0132984669
