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please show all work Suppose Alpha Industries and Omega Technology have identical assets that generate identical cash flows. Alpha Industries is an all-equity firm, with
please show all work
Suppose Alpha Industries and Omega Technology have identical assets that generate identical cash flows. Alpha Industries is an all-equity firm, with 10 million shares outstanding that trade for a price of $20 per share. Omega Technology has 20 million shares outstanding as well as debt of $60 million. a. According to MM Proposition I, what is the stock price for Omega Technology? Question 2 1 pts b. Suppose Omega Technology stock currently trades for $8 per share. What arbitrage opportunity is available? Buy 10 omega, sell 7 alpha short, take on debt for $60 Sell 10 omega short, buy 7 alpha, take on debt for $60 Sell 30 omega short, buy 15 alpha, take on debt for $60 Buy 30 omega, sell 15 alpha short, take on debt for $60 Step by Step Solution
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