On the year 2016 the AT&T company was reported to have talks on merging with the Time Warner company. Considering that these two companies are multinational and they hold an important position when it comes to the worlds media industry then this was a matter of concern. The company was purchased for $108.7billion and the merge was approved in 2017. This report will then give a detailed research on the background of the companies and a timeline of the key events regarding the merge will be given. AT&T is an American multinational company. It is the largest in the world when it comes to telecommunications. This company is the second largest when it comes to the provision of telephone services in United States and the largest in the providence of fixed telephone. Its headquarters are found in Dallas Texas. It was founded 34 years ago in 1983 on the exist. Random performance therefore was not experienced in the company. Semi strong market efficiency This efficiency is also used in producing data accurately as compared to the weak form. In this test the annual reports are used and indicated the take of the public to such announcements The semi strong test of efficiency is tested by the increase and decrease of the prices needed to analyse the abnormal returns. The Time Warner results will be examined to check whether there were abnormal returns that were different from zero after the announcements. Hypothesis test The t-test needed to be tested and the expected result was to be different from zero. A 5% level of significance was used as well as a 95% confidence for the standard distribution. According to the t-test abnormal returns are divided by the standard error showing the risk of the market together with the stock returns. [...]
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