Graph of the australian government ten-year bond yield

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This is a real-life example which happened in Australia. NRMA successfully demutualised in August 2000. It then used the name IAG. At around 13 September 2005, share price of IAG was about $5.50. David Tweed (an individual) sent out letters to shareholders to offer to buy their IAG shares by 18 annual instalments of 45 cents per share. (a) Do you think it was a fair offer? Explain your reason(s). What factors do you need to consider in assessing such an offer? (b) Do you think Mr Tweed would make such an offer at around 2016-( government Bond Yield at all time lows) ? (assuming share price was still $5.50) For your information, consider the graph of the Australian Government 10-year Bond yield.

Reference no: EM131974179

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