You are a risk arbitrageur and you observe the following information about a deal: the current price
Question:
a. i. Calculate the offer premium.
ii. Describe the transaction you will undertake to capture the premium.
iii. Show how your transaction will make money.
b. Is it possible that your actual return will be less than the expected return? Describe two situations that can cause the risk in risk arbitrage.
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Related Book For
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
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