Business, 10.05.2021 19:50 lunagio67

You are running an arbitrage-based hedge fund focusing on merger transactions. Company XYZ has just received a tender offer for $46 per share from the management of Acquisi Corp. For the past two weeks, XYZ's shares traded at around $31, but immediately after the tender offer the market price of those shares rose to their current level of $42. On the other hand, Acquisi Corp share price fell from $83 to $81 right after the announcement of the proposed takeover. Further, interest rates in the economy have recently risen from 2.5 percent to 3.2 percent based on renewed fears of inflation. a. Calculate the market's implied probability that the takeover will imately be successful.
b. Explain how you can use this information to decide whether you should take a long position or a short position in the stock of Company XYZ.

Answers: 2

Show answers

Another question on Business

Business, 21.06.2019 20:10

In three to four sentences, explain the effect of a price ceiling on the quantity of a good and who this intervention intends to assist

Answers: 3

Answer

Business, 22.06.2019 00:50

Cool beans is a locally owned coffee shop that competes with two large coffee chains, planeteuro and frothies. alicia, the owner, hired two students to count the number of customers that entered each of the coffee shops to estimate what percent of people who are interested in coffee are visiting each shop. after a week, the students found the following results: 589 visited cool beans, 839 visited planeteuro, and 1,290 visited frothies. the students were surprised that cool beans had 139 visits on monday which represented 59% of all people who visited one of the three coffee shops on mondays. how many people visited one of the three coffee shops during the week?

Answers: 2

Answer

Business, 22.06.2019 10:10

At the end of year 2, retained earnings for the baker company was $3,550. revenue earned by the company in year 2 was $3,800, expenses paid during the period were $2,000, and dividends paid during the period were $1,400. based on this information alone, retained earnings at the beginning of year 2 was:

Answers: 1

Answer

Business, 22.06.2019 20:10

Mikkelson corporation's stock had a required return of 12.50% last year, when the risk-free rate was 3% and the market risk premium was 4.75%. then an increase in investor risk aversion caused the market risk premium to rise by 2%. the risk-free rate and the firm's beta remain unchanged. what is the company's new required rate of return? (hint: first calculate the beta, then find the required return.) do not round your intermediate calculations.

Answers: 2

Answer

You know the right answer?

You are running an arbitrage-based hedge fund focusing on merger transactions. Company XYZ has just...

Questions