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Optimal Cash Tender Offers *
Author(s) -
Schnabel Jacques A.,
Roumi Ebrahim
Publication year - 1989
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1989.tb01877.x
Subject(s) - tender offer , cash , computer science , simple (philosophy) , discounted cash flow , fortran , stock price , stock (firearms) , microeconomics , operations research , cash flow , economics , finance , programming language , mathematics , mechanical engineering , paleontology , corporate governance , philosophy , epistemology , series (stratigraphy) , biology , engineering , shareholder
This paper develops a contingent claims analysis, a simple decision model for determining the optimal price in a cash tender offer. The implied behavior of the optimal tender offer premium over the market price of the target common stock is also investigated. Those readers interested in applying the model may obtain an interactive computer program written in FORTRAN and implementable on a personal computer from the authors on request.