(10 points) List at least three weaknesses of the analysis. (5 points) Why is the covariance of debt and the market equal to zero? What impact does this have on beta? 2. (10 points) Explain how having only 50% of M&As succeed a means of justifying the efficient market hypothesis.
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Step 1: Restate the tasks and map out the plan: (a) list at least three weaknesses of the analysis, (b) explain why Cov(debt, market) = 0 and the effect on beta, and (c) explain how a ~50% success rate for M&As supports the efficient market hypothesis (EMH). Show more…
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