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You plan to test the market efficiency of NYSE using an event study methodology focusing on whether acquiring firms experience share price reactions to takeover
You plan to test the market efficiency of NYSE using an event study methodology focusing on
whether acquiring firms experience share price reactions to takeover announcements. Your sample
consists of three acquiring firms:
Company A: Merger announcement date Jan 15, 2021
Company B: Merger announcement date Feb 15, 2021
Company C: Merger announcement date April 10, 2021
You establish an 11-day testing period of returns around the event dates, the event date plus 5 days
before and 5 days after. The following table provides the three acquiring firm stock prices during
12-day periods around merger announcement dates:
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Entrepreneurial Finance
Authors: J . chris leach, Ronald w. melicher
4th edition
538478152, 978-0538478151
