The Following Are the Daily Returns for Both the Overall

question 49

Multiple Choice

The following are the daily returns for both the overall market and for Coastal Engineering, Inc. What is the cumulative abnormal return on Coastal Engineering, Inc., stock for this five-day period?
$$\begin{array} { r r r } \text { Date } & \text { R(m) } & \text { Alpha } \\\text { 4-Aug } & 1.00\%& 1.10\% \\\text { 5-Aug } & - .30\% & .20\% \\\text { 6-Aug } & - .20\% & .30\%\\\text { 7-Aug } & .50 \% & - .30\% \\\text { 9-Aug } & .20\% & - .10\%\end{array}$$

• A)-1.2%
• B)-.5%
• C)0%
• D).2%
• E)1.2%

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Definitions:

Target Capital Structure

The optimal mix of debt, equity, and other financing sources that a company aims to maintain to finance its operations and growth.

Total Value

The complete worth of an asset, business, or investment, taking into account all forms of value including monetary, strategic, and intrinsic.

Operating Characteristics

Features of a business or a system that influence its capacity to generate profit or achieve its operational goals.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity used to finance its overall operations and growth.