Swenson Co. announced its merger plans on August 25 and had a daily return of 0.7 percent. Tyler Co. announced its merger plans on August 26 and had a daily return of 0.5 percent. The Underwood Co. announced its merger plans on August 27 and had a daily return of -0.1 percent. The daily market returns for August 25 through August 27 were 0.2, 0.3, and -0.4, respectively. What is the combined cumulative abnormal return for the announcement date?
A) 0.0 percent
B) 0.2 percent
C) 0.6 percent
D) 0.8 percent
E) 1.0 percent

Question

Quizplus · Accepted Answer

The Answer of Swenson Co. announced its merger plans on August 25 and had a daily return of 0.7 percent. Tyler Co. announced its merger plans on August 26 and had a daily return of 0.5 percent. The Underwood Co. announced its merger plans on August 27 and had a daily return of -0.1 percent. The daily market returns for August 25 through August 27 were 0.2, 0.3, and -0.4, respectively. What is the combined cumulative abnormal return for the announcement date?
A) 0.0 percent
B) 0.2 percent
C) 0.6 percent
D) 0.8 percent
E) 1.0 percent