On January 3, 2019, Bristol-Myers Squibb Company (NYSE: BMY) announced that BMY would acquire Celgene Corporation (NASDAQ: CELG) in a cash and stock transaction (see Appendix for details). You are hired as a financial analyst to analyze the financial aspects of this merger. Using/Analyzing historical daily data on stock prices of BMY and CELG as well as index prices of S&P 500 provided in the sheets named: BMY, CELG, and S&P500, respectively, answer the following questions: For Qs 1 8, you must show your work on the sheet named Part I WorkSheet to receive any credit.

Q1. What is the beta of BMY? Use returns on S&P500 as market returns. Use the January 3, 2018 December 31, 2018 period to estimate the beta. (5 pts)

Q2. What is the beta of CELG? Use returns on S&P500 as market returns. Use the January 3, 2018 December 31, 2018 period to estimate the beta. (5 pts)

Q3. Compute the cumulative abnormal return of BMY stock over the window (-5, +5) around the announcement day. Use returns on S&P500 as market returns. Use 0.008% as a daily risk free rate (this was the average one-month Tbill rate around this period). (5 pts)

Q4. Compute the cumulative abnormal return of CELG stock over the window (-5, +5) around the announcement day. Use returns on S&P500 as market returns. Use 0.008% as a daily risk free rate. (5 pts)

Q5. Compute the one-year post announcement cumulative abnormal return of BMY stock over the period from the announcement day to 12/31/2020. Use returns on S&P500 as market returns. Use 0.008% as a daily risk free rate. (5 pts)

Q6. Compute the one-year post announcement cumulative abnormal return of CELG stock over the period from the announcement day to 11/20/2020. Use returns on S&P500 as market returns. Use 0.008% as a daily risk free rate. (Note: CELG was delisted from the exchange due to the acquisition by BMY). (5 pts)

Q7. Interpret/Explain your findings in Q3 through Q6 and discuss the implications of your findings in terms of the context of returns to bidders/targets discussed in the Chapter. (5 pts)

Q8. Compute the Sharpe ratios of BMY (5 pts), CELG (5 pts), and S&P500 (5 pts). Use the January 3, 2019 December 31, 2019 period for BMY and S&P500 and the January 3, 2019 November 20, 2019 period for CELG to compute the ratios. Use 2.01% as a risk free rate (this was the average oneyear T-bill rate during 2019). Who was the winner amongst the three? Explain and interpret your results