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

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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Given the following bid and ask prices quoted by a dealer: Bid price of $1.1250/€ and Ask price of $1.1255/€, which of the following statements best describes the Bid-Ask Spread as a percentage? The dealer expects to make a profit of $0.005/€ on each transaction. The Bid-Ask Spread is 0.0044% of the bid price. The Bid-Ask Spread is 0.005% of the transaction value. The Bid-Ask Spread represents the dealer's margin on top of the selling price.
3) Can you please answer the question in the photo?
None
An S Corp has a balance of 20 in AAA and 30 in AEP before considering distributions. If the S Corp makes a distribution of 50, which of the following is true? AAA becomes (30) and AEP remains 30. AAA becomes 0, AEP remains 30. AAA becomes (30), AEP becomes 0. AAA becomes 0, AEP becomes 0.
. GT Bank Ghana Limited quotes JPY/EUR 155-165, and GCB Bank quotes EUR/JPY0.0059-0.0063a. Are these quotes identical? b. If not, is there an opportunity for arbitrage? c. If there is an opportunity for arbitrage, how would one profit from it? 3. Given the bid-ask quotes for jpy/gbp 220-240, at what rate will:(a) Mr. Agbo purchase gbp? (b) Mr. Agbo sell gbp? (c) Mr. Debrah purchase jpy?(d) Mr. Kwaku sell jpy?
21. If Fincorp stock trades in a dealer market with bid price of 55.25 and asked price of 55.50, a) Suppose you have submitted an order to your broker to buy at market. At what price will your trade be executed? b) Suppose you have submitted an order to sell at market. At what price will your trade be executed? c) Suppose you have submitted a limit order to sell at $55.62. What will happen? d) Suppose you have submitted a limit order to buy at $55.37. What will happen?
Suppose that a European call option to buy a share for $ 90.00 costs a . Under what circumstances will the SELLER of the option make a profit ? \$4.00 and is held until maturity . ( DRAW the GRAPH to show ALL answers ) b . when will the option be exercised ( at what price , show on graph ) ? c . What is the Maximum profit for SELLER and at what stock price ? d . What is the Maximum loss for SELLER and at what stock price ? e . What will be profit / loss for SELLER if St is 150 ?
suppose you short sell 100 shares of IBX, now selling at $172 per share. (a) what is your maximum possible loss? (b) what happens if you simultaneously place a stop-buy order at $182?
You purchase 20 call option contracts with a strike price of $110 and a premium of $1.85. Assume the stock price at expiration is $119.12. a. What is your dollar profit? (Do not round intermediate calculations.) Dollar profit S 14,540 b. What is your dollar profit if the stock price is $105.07? (A negative value should be indicated by a minus sign. Do not round intermediate calculations.) If the stock price is $105.07, the call is worthless so the dollar profit is $
Consider the following limit order book. Limit buy order: Price Size 84.77 200 84.76 100 84.75 400 Limit Sell Order Price Size 84.79 100 84.80 300 85.70 700 If you submitted a market sell order for 400 shares, how much would you receive?
Suppose you combine two option contracts as follows. You buy a call option on a stock with an exercise price of $65 for a premium of 9$. At the same time you sell a call option on the same stock with an exercise price of $75 for a premium of $4. Both calls expire at the same time. The stock sells currently at $72. Answer the following questions about this investment strategy: 1. Determinethevalueatexpiration(thepayoffs)andtheprofitunderthefollowingoutcomes: a. The price of the stock at expiration is $78b. The price of the stock at expiration is $69c. Thepriceofthestockatexpirationis$62 2. Determine the following:a. The maximum profit b. The maximum loss 3. Determinethebreakevenstockpriceatexpiration(thestockpriceforwhichyourstrategydeliversno profit and no loss). 4. Depictthepayoffandprofitdiagramsofyourinvestmentstrategy.
Q6. We have the following order book for stock ABC. BID PRICE (QUOTE) 99.80 99.70 99.50 99.20 99.00 ASK PRICE (QUOTE) ASK OTY 16 24 BID QTY 100.20 20 299 100.30 100.40 100.60 100.90 175 233 500 400 500 a) At what average price will you be able to buy 100 stocks of ABC in you have put in a market order? b) What is the impact cost if calculated from the mid-quote price? c) What will be the last traded price shown by the exchange just after your trade has completed?

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