Whats the value impact of acquisition announcement

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Reference no: EM133290928

Demetallica limited (DRM) is a public company with its stocks listed on the Australian Securities Exchange. On Monday 19 September 2022, AIC Mines announced a takeover offer for Demetallica. You are provided with the following information about DRM and ASX200 index (a proxy for the market portfolio). Assume the daily risk-free rate is 0 and the CAPM holds.

Date	DRM	ASX200
Closing price per share, Friday 16 September 2022	$0.20	6739.10
Closing price, Monday 19 September 2022	$0.29	6719.90
Number of outstanding shares	102 million shares
Stock beta	1.46	1.00

Required: [Instruction: show your working. Do not round intermediate answers and round your final answers to two decimal places, e.g., 1.01%, $0.01 million.]

Use the CAPM to calculate DRM's abnormal return on 19 September 2022.
What's the value impact of this acquisition announcement on DRM's shareholder wealth on the announcement day 19 September 2022?

Reference no: EM133290928

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