According to the findings of capital markets research,the existence of post-announcement abnormal returns for a given firm suggests that for firms in the same industry:

Question

Quizplus · Accepted Answer

The existence of post-announcement abnormal returns for a given firm suggests that there was an unexpected event that affected the company's value. If this event was specific to the particular firm, there should be no effect on subsequent post-announcement abnormal returns for other firms in the same industry. However, if the event was industry-wide, then it is likely that other firms in the industry will also experience similar abnormal returns. In this case, subsequent post-announcement abnormal returns will decrease as market participants will have already adjusted their expectations and priced in the information. Therefore, choice B is the best answer.

According to the Findings of Capital Markets Research,the Existence of Post-Announcement