Please answer part B question

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Part B Company A has 6 million shares in issue and Company B 8 million. On day 1 the matket value per share is \pm 90 for A and f60 for B. On day 2 , the management of A deeides, at a private meeting, to make cash takeover bid for B at a price of 70 per share. The takeover will produce large operating savings with a value of 160 million. On day 6, A publicly announces an unconditional offer to purchase all shares of B at a price of 70.00 per share with settlement on day 20 . Details of the large savings are not announced and are not public knowledge. On day 12, A announces details of the savings, which will be derived from the takeower. Required: (a) Ignoring tax and the time-value of moncy between days 1 and 20 , and assuming the details given are the only factors having an impact on the share prices of A and B, determine the day 2 , day 6 , and day 12 share prices of A and B if the market is: 1. Semi-strong form efficient, and 2. Strong form efficient In each of the following circumstances: (i) the purchase consideration is cash as specified above. and (5 marks) (ii) the purchase consideration, decided upon on day 2. and publicly announced on day 6 , is one newly issued share of A for each share of B. (10 marks) (b) "A market in which prices aluays "finlly nefled" available information is called "efficient", The ideal is a market in which prices provide accunate signals for resource allocation." Required: Critically evaluate the above statement, ensuring the response is supported with relevant empirical evidence. Discuss whether the capital market in Hong Kong is considered to be an efficient market. (35 marks) In this section students should demonstrate an understanding and knovledge of the theonetical aspects that underpin the differing stengths of market efficiency: The discussion / evaluation should be supported with relevant, cantemporary, academic research that has been undertaken within this field and should be nefenenced accondingly: Real-life examples could be used for the discussioin of Hong Kong stock market. Enstere the response does not become overly descriptive within its approach. rather, attempt to incorporate a critical vienpoint throughout, allowing logical conclusians to be offened. Total for Part B - 50 marks