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Expectations Investing
book

Expectations Investing

by Alfred Rappaport, Michael J. Mauboussin, Peter L. Bernstein
February 2003
Intermediate to advanced
256 pages
6h 56m
English
Harvard Business Review Press
Content preview from Expectations Investing
the postannouncement cash SVAR of 15.6 percent multiplied by the 53
percent postmerger ownership percentage.
The selling shareholders in a fixed-value offer bear no price risk in
the preclosing period.In fact,the more that Buyer Inc.’s stock price falls,
the less synergy risk the selling shareholders assume after the closing.
With a 10 percent decrease in Buyer Inc.’s stock from $100 to $90, only
58.3 percent of the premium offer ($0.7 billion of the original $1.2 bil-
lion) remains at risk. Multiplying that percentage by the selling share-
holders’47 percent stake in the combined company yields a premium at
risk of 27.4 percent. Again, the question is ...
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Publisher Resources

ISBN: 9781633691520