Tech Stock Valuation

ANNOUNCEMENT EFFECTS BY INDUSTRY GROUP 197

In Table 8.2, event-period CAPEs are generally negative and statistically sig-

nificant at the 1% level for the n = 27 sample of simple goodwill write-off

announcements. Simple goodwill write-off announcements lead to a relatively

large and statistically significant stock-price reaction (event-period return)

of −2.23% (t = −2.31) using the market-model approach, −2.48% (t = −2.51)

using the mean-adjusted approach, and −2.83% (t = −2.93) using the market-

adjusted approach. On average, the stock-price reaction to simple goodwill write-

off announcements is somewhat smaller than the effect when such

announcements ...