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Suppose that the price of the target firm before the announcement is 42 and after the announcement it is 47. The price of the acquirer before the announcement is 75 and after it is 75. The acquirer offers to exchange 0.707 shares of the acquirer for each share of the target at the completion of the deal. Compute the deal spread after the announcement. 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 before the announcement is 42 and after the announcement it is 47. The price of the acquirer before the announcement is 75 and after it is 75. The acquirer offers to exchange 0.707 shares of the acquirer for each share of the target at the completion of the deal. Compute the deal spread after the announcement. 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
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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Suppose that the price of the target firm before the announcement is 42 and after the announcement it is 47. The price of the acquirer before the announcement is 75 and after it is 75. The acquirer offers to exchange 0.707 shares of the acquirer for each share of the target at the completion of the deal. Compute the deal spread after the announcement. 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 %.
Transcribed Image Text:Suppose that the price of the target firm before the announcement is 42 and after the announcement it is 47. The price of the acquirer before the announcement is 75 and after it is 75. The acquirer offers to exchange 0.707 shares of the acquirer for each share of the target at the completion of the deal. Compute the deal spread after the announcement. 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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