subject
Business, 06.07.2019 02:10 angelearlyp9ynm9

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 tradefor a price of$22 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? b. suppose omega technology stock currently trades for $11 per share. what arbitrage opportunity is available? what assumptions are necessary to exploit this opportunity?

ansver
Answers: 1

Another question on Business

question
Business, 22.06.2019 10:50
Bill dukes has $100,000 invested in a 2-stock portfolio. $62,500 is invested in stock x and the remainder is invested in stock y. x's beta is 1.50 and y's beta is 0.70. what is the portfolio's beta? do not round your intermediate calculations. round the final answer to 2 decimal places.
Answers: 2
question
Business, 22.06.2019 14:20
Anew 2-lane road is needed in a part of town that is growing. at some point the road will need 4 lanes to handle the anticipated traffic. if the city's optimistic estimate of growth is used, the expansion will be needed in 4 years and has a probability of happening of 40%. for the most likely and pessimistic estimates, the expansion will be needed in 8 and 15 years respectively. the probability of the pessimistic estimate happening is 20%. the expansion will cost $ 4.2 million and the interest rate is 8%. what is the expected pw the expansion will cost?
Answers: 1
question
Business, 22.06.2019 16:40
Determine the hrm’s role in the performance management process and explain how to ensure the process aligns with the organization’s strategic plan.
Answers: 1
question
Business, 22.06.2019 19:30
Each row in a database is a set of unique information called a(n) table. record. object. field.
Answers: 3
You know the right answer?
Suppose alpha industries and omega technology have identical assets that generate identical cash flo...
Questions
question
History, 01.03.2021 17:20
question
Mathematics, 01.03.2021 17:20
question
Mathematics, 01.03.2021 17:20
Questions on the website: 13722363