ABC corporation trading at $80 per share has just bid $50 per share for XYZ corporation, currently trading at $40 per share in a hostile takeover attempt. The most common risk or takeover arbitrage strategy would be to
A) there can never be an arbitrage opportunity in a hostile takeover scenario
B) buy shares of the target company (XYZ) and short shares of the aggressor (ABC)
C) buy shares of the aggressor company (ABC)
D) sell shares of the target company (XYZ)
Answer: B) buy shares of the target company (XYZ) and short shares of the aggressor (ABC)