Suppose that the price of the target firm 43 is after the announcement. The acquirer's share price is 74 after the announcement, and it is 82 on the deal completion date. The acquirer offers to exchange 0.679 shares of the acquirer for each share of the target at the completion of the deal. Compute the return for a merger arbitrageur assuming that the deal is successful. The answer should be given_in decimal form with three decimals. For example, write 0.105 instead of 10.5 or 10.5 % when the correct answer is 10.5 %.
Suppose that the price of the target firm 43 is after the announcement. The acquirer's share price is 74 after the announcement, and it is 82 on the deal completion date. The acquirer offers to exchange 0.679 shares of the acquirer for each share of the target at the completion of the deal. Compute the return for a merger arbitrageur assuming that the deal is successful. The answer should be given_in decimal form with three decimals. For example, write 0.105 instead of 10.5 or 10.5 % when the correct answer is 10.5 %.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Suppose that the price of the target firm 43 is after the announcement. The acquirer's share price is 74 after the announcement, and it is 82 on the deal completion date. The acquirer offers to exchange 0.679
shares of the acquirer for each share of the target at the completion of the deal. Compute the return for a merger arbitrageur assuming that the deal is successful.
The answer should be given in decimal form with three decimals. For example, write 0.105 instead of 10.5 or 10.5 % when the correct answer is 10.5 %.
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