Question
On November 4, 2019 McDonalds Corporation fired its CEO for having a consensual relationship in the workplace. The following data on their stock price, the
On November 4, 2019 McDonalds Corporation fired its CEO for having a consensual relationship in the workplace. The following data on their stock price, the level of the S&P 500, and the risk-free interest rate come from the days surrounding the announcement:A)What is the expected return for McDonalds from the CAPM for November 4 and 5?
B)What is the actual return of McDonalds for November 4 and 5?
C) What is the cumulative abnormal return for McDonalds for these two days? If the market capitalization (Price * shares outstanding) for McDonalds is $149.949B, how much did the firing of the CEO cost McDonalds shareholders?
Day November 1 November 4 November 5 McDonald's Price 197.78 190.16 189.65 S&P 500 3050.72 3078.96 3075.10 Risk free rate .000046 .000046 .000046 McDonald's has a Beta of .26
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