InBev made an unsolicited tender offer to acquire AB for $70 per share. AB was trading after the offer was announced at $63 per share. Merger arbitrageurs estimated at 8% the probability of deal failure, and in case of deal failure, they estimated AB share price would return to the previous trading price of $50 per share. They also estimated the deal to be completed in 180 days. What are arbitrageurs' expected annualized return on the investment (ROI) associated with investing in AB after the takeover announcement?

Use the simple interest method to annualize returns and ignore commission costs on purchasing shares; Input your answer in decimals: e.g. 0.23.

Annualized ROI: