Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18 (7/18), February 12 (2/12),

image text in transcribed

Ross Co., Westerfield, Inc., and Jordan Company announced a new agreement to market their respective products in China on July 18 (7/18), February 12 (2/12), and October 7 (10/7), respectively. Given the information below, calculate the cumulative abnormal return (CAR) for these stocks as a group. Assume all companies have an expected return equal to the market return. (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations. Round your answers to 1 decimal place.) Date 7/12 7/13 7/16 7/17 7/18 7/19 7/20 7/23 7/24 Ross Co. Westerfield, Inc. Market Company Market Company Return Return Date Return Return -0.4 -0.1 2/8 -0.4 -0.1 1.4 0.3 2/9 -0.5 -0.1 0.2 0.7 2/10 0.2 0.6 -0.6 -0.2 2/11 0.4 2.3 -0.6 1.3 2/12 -0.1 0.1 -2.1 -0.5 2/15 1.5 -0.9 -0.5 2/16 0.3 0.6 0.4 2/17 -0.1 0 02/18 1.8 0.4 Jordan Company Market Company Date Return Return 10/1 1.6 0.8 10/2 1.5 0.8 10/3 0.5 1.3 10/6 -0.1 -0.5 10/7 -2 -0.5 10/8 1 0.4 10/9 -0.5 -0.8 10/10 0.1 -0.1 10/13 -0.4 -0.6 0.7 Abnormal returns (Ri RM) W'field Jordan Days from announcement Ross Sum Average abnormal return Cumulative average residual

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

University Finances Accounting And Budgeting Principles For Higher Education

Authors: Dean O. Smith

1st Edition

1421427257, 978-1421427256

More Books

Students also viewed these Finance questions