DISCUSSION 1 and DISCUSSION 2

 DISCUSSION 1 and DISCUSSION 2

This discussion question has two parts. Respond to both parts to receive full credit for this assignment.

Part 1: What is a hostile takeover and what generally happens to the stock price of the firm being acquired in a hostile takeover?

Part 2: How does a hostile takeover affect the company’s stakeholders (shareholders, executives, employees, and society in general)? Is it usually beneficial or detrimental to these stakeholders? Why?

Include some news that is less than a year old that discusses an in-process or recently completed merger in your answer. Briefly discuss the main issues in that merger and whom the merger is likely to benefit or hurt.

DISCUSSION 1 and DISCUSSION 2

Must post first.

The Law of One Price states that equivalent investment opportunities trading in different competitive markets will have the same price. Yet, one can find examples where that rule seems to be violated. It is a well-known fact that Americans pay a much higher price for most prescription drugs than people in most other countries. Also, the price (when adjusted for exchange rates) for the same make and model of automobile varies greatly across different countries. Furthermore, the price of a barrel of crude oil varies between locations. For example, on October 12, 2012, the price for Brent crude oil produced in Europe was $114.21 and the price for West Texas Intermediate (WTI) crude oil produced in Texas was $91.86.

Do these three cases demonstrate that the Law of One Price is false? Why or why not?