Determination of abnormal return

Reference no: EM1353753

On Wednesday June 24, 1998, AT&T announced its intent to acquire TCI. The assets of obtained in the acquisition helped create AT&T Broadband. Three years later, on Monday July 9, 2001, Comcast announced its intent to purchase the Broadband assets from AT&T.
a) Given the following data, what was AT&T's abnormal return at the announcement of the TCI acquisition?

Date AT&T stock price S&P 500 index
06/23/1998 32.2566 1119.49
06/24/1998 29.6045 1132.88

b) Given the following data, what was AT&T's abnormal return at the announcement of the Comcast bid?
Date AT&T stock price S&P 500 index
07/06/2001 16.6846 1190.59
07/09/2001 18.6604 1198.78

c) Do you think the results in Parts A & B are related?

Reference no: EM1353753

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