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The Multiple Option Bidding Strategy Introduces a Certain Level of Uncertainty

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The multiple option bidding strategy introduces a certain level of uncertainty in determining the amount of cash the acquirer will have to ultimately pay out to target firm shareholders, since the number choosing the all cash or cash and stock option is not known prior to the completion of the tender offer.


Definitions:

Standard Error

A measure of the variability or dispersion of a sample statistic, indicating its precision as an estimate of the population parameter.

Sample Median

The middle value of a sample when the values are arranged in ascending or descending order, or the average of the two middle values if there is an even number of observations.

Resamples

The process of taking repeated samples from observed data, often used for bootstrapping or validating statistical models.

Bootstrap Confidence Interval

A method for estimating the confidence interval of a parameter by resampling with replacement from the data set and calculating the interval for each sample.

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