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Lindbergh Airlines is planning to make an offer for Flight Simulators, Inc. The shares of Flight Simulators are currently selling for $40 per share a.
Lindbergh Airlines is planning to make an offer for Flight Simulators, Inc. The shares of Flight Simulators are currently selling for $40 per share a. If the tender offer is planned at a premium of 60 percent over market price, what will be the offered share price for Flight Simulators? Value offered per share b. Suppose before the offer is actually announced, the share price of Flight Simulators rises to $56 because of strong merger rumors. If you buy the shares at that price and the merger goes through at the price computed in part a, calculate your percentage gain. (Round the final answer to 2 decimal places.) Percentage gain % c. There is always the possibility that the merger will be called off after it is announced and the shares will fall to their original price. Calculate your loss if this occurs. (Round the final answer to 2 decimal places.) Percentage loss % d-1. If there is a(n) 80 percent probability that the merger will proceed and only a 20 percent chance that it will be called off, what is the expected value of return? Assume your purchase price was $56. (Do not round intermediate calculations. Round the final answer to 2 decimal places.) Expected value of return % d-2. Does this appear to be a good investment
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