1. Publications
  2. Applied Economics Letters, 11/2010
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On the Look-out for a White Knight: Options-based Calculation of Probability and Expected Value of Increased Bids in Hostile Takeover Battles

Takeover bids provide an option right to the target's shareholders; they guarantee the offered price but maintain the chance of higher offers. Using Option Pricing Theory (OPT) we estimate the probability and expected value of higher bids from target stock prices.

15. November 2010

Authors Stefan Eichler Dominik Maltritz

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Keywords

prices takeover bids option pricing theory

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