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B4. (Arbitrage) A large investor wants your firm to help him sell a large block of 50,000 shares of a stock. The current market price

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B4. (Arbitrage) A large investor wants your firm to help him sell a large block of 50,000 shares of a stock. The current market price of the stock is $36.00 per share. When this block of stock hits the market, it should depress prices from their current level. Consequently, this investor is willing to sell to your firm at a price of $34.00 per share. a. If transaction costs are $0.40 per share and the market price does not move, what profit will your firm make with this deal? b. If the market price drops to $33.00 per share, what profit will your firm make c. What is the largest price drop that will still enable your firm to make a profit? B5. (Tax asymmetry) A 20-year zero-counon hond miut

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