McCormick and Tryon, Inc., is a “shark watcher,” hired by fi rms fearing takeover by larger companies. This fi rm has found that one of its clients, Pare and Oyd Co., is being considered for takeover by two fi rms. The fi rst, Engulf and Devour, considered 20 such companies last year and took over 7. The second, R. A. Venus Corp., considered 15 such companies last year and took over 6. What is the probability of Pare and Oyd’s being taken over this year, assuming that
- The acquisition rates of both Engulf and Devour and R. A. Venus are the same this year as they were last year?
- This year’s acquisition rates are independent of last year’s?
In each case, assume that only one fi rm may take over Pare and Oyd.
Solution
