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Determining the inferred based on information

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Alpha Inc., has just announced that it will be acquiring Bravo Inc., for $25/share in an all- cash deal. On the day of the announcement, Alpha's stock price declined from $42/share to $40/share, while that of Bravo Inc. increased from $12/share to $22/share. Which of the following can be inferred based on this information?

I. On the day of the announcement, the arbitrage discount is $3/share

II. On the day of the announcement, the arbitrage discount is $13/share

III. The acquisition premium in the deal is 83.33%

A. I only

B. II only

C. I and III

D. II and III

E. III only

Reference no: EM132509490

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