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Does look like there is an arbitrage opportunity here

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Reference no: EM132995623

You have the following information on two companies.

Company A: 2,000,000 shares outstanding, market price = $40 per share

Company B: 1,500,000 shares outstanding, market price = $100 per share

Company A owns 60% of the shares of Company B.

Question 1: Assuming that Company A's other assets generate positive cash flow, does it look like there is an arbitrage opportunity here

 

Reference no: EM132995623

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