Business, 29.01.2021 03:20 jpsaad00

AbbVie is a pharma company. In the beginning of 2019, beta of AbbVie was 1.65, the risk-free rate was 3%, and the market return was 12%. In October of 2019, AbbVie acquired another big pharma company called Allergan for $63 billion to increase the diversity of its drug portfolio. The acquisition reduced the firm's risk and thus AbbVie's beta was 1.35 in 2020. Assuming that the risk-free rate and the market returns did not change during this time period, how much did the acquisition of Allergan reduce AbbVie's cost of equity

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AbbVie is a pharma company. In the beginning of 2019, beta of AbbVie was 1.65, the risk-free rate wa...

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