1.On August 23, 2002, McAfee.com Corporation agreed to a takeover offer by Network Associates to acquire each outstanding share of McAfee.com’s stock in exchange for $8.00 in cash plus 0.675 of a...

1.On August 23, 2002, McAfee.com Corporation agreed to a takeover offer by Network Associates to acquire each outstanding share of McAfee.com’s stock in exchange for $8.00 in cash plus 0.675 of a share of Network Associates. At the close of trading on the merger agreement date, McAfee.com’s stock was $17.72 and Network Associates’s stock price was $14.56. The merger was expected to be completed by September 14, 2002. At the time, the 3-month Treasury bill rate was 1.75%. Arbitrageurs were receiving short interest rebates of 1.50% and were paying commission costs of