IMM stock on 11/1 traded at $10. On that day, the company announced an acquisition of a small software company and its share price increased by 4 cents ($0.04). On that day the market declined by 2%. Assume a beta of 1.5. Does the market like the merger? b) If the firm has 100,000 shares outstanding, what is the abnormal gain (loss) to the acquirer shareholders?

IMM stock on 11/1 traded at $10. On that day, the company announced an acquisition of a small software company and its share price increased by 4 cents ($0.04). On that day the market declined by 2%. Assume a beta of 1.5. Does the market like the merger? b) If the firm has 100,000 shares outstanding, what is the abnormal gain (loss) to the acquirer shareholders?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 12MCQ

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