Chicago Savings Corp. is planning to make an offer for Ernie’s Bank & Trust. The stock of Ernie’s Bank & Trust is curren

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Chicago Savings Corp. is planning to make an offer for Ernie’s
Bank & Trust. The stock of Ernie’s Bank & Trust is
currently selling for $46 a share. a. If the tender offer is
planned at a premium of 50 percent over market price, what will be
the value offered per share for Ernie’s Bank & Trust? (Do not
round intermediate calculations and round your answer to the
nearest whole dollar.) Value Offered Per Share = ??? b. Suppose
before the offer is actually announced, the stock price of Ernie’s
Bank & Trust goes to $64 because of strong merger rumors.
If you buy the stock at that price and the merger goes through (at
the price computed in part a), what will be your percentage gain?
(Do not round intermediate calculations. Input the amount as a
positive percent value rounded to 2 decimal places.) Percentage
gain = % c. Because there is always the possibility that the merger
could be called off after it is announced, you also want to
consider your percentage loss if that happens. Assume you buy the
stock at $64 and it falls back to its original value after the
merger cancellation. What will be your percentage loss? (Do not
round intermediate calculations. Input answer as a positive value.
Input your answer as a percent rounded to 2 decimal places.) d:
There is an 80% probability that the merger will go through when
you buy the stock at $64, and only a 20 percent chance that it will
get called off. Compute the expected value of the return on
investment.