BAD? Company's stock price is $20?, and it has 8.0 million shares outstanding. You believe that if you buy the company and replace its? management, its value will increase by 34%. Assume that BAD has a poison pill with a 15% trigger. If? triggered, all target shareholders other than the acquirer will be able to buy one new share in BAD for each share they own at a 60% discount. Assume that the price remains at $20 while you are acquiring your shares. If? BAD's management decides to resist your buyout? attempt, and you cross the 15% threshold of? ownership:
a. How many new shares will be issued and at what? price?
Number of new shares issued is ____. (Round to the nearest integer)
The Shares will be issued at $___ per share. (Round to the nearest cent)
b. What will happen to your percentage ownership of? BAD?
The percentage ownership will be ___%. (Round to two decimal places)
c. What will happen to the price of your shares of? BAD?
The new stock price will be $___? (Round to two decimal places)
d. Do you lose or gain from triggering the poison? pill? If you? lose, where does the loss go? (who benefits)? If you? gain, where does the gain come from? (who loses)?
The gain (loss) is $_____. (Round to the nearest dollar, positive if gain, negative if loss, zero if neither)
If you lose, where does the loss go (who benefits)? If you gain, where does the gain come from (who loses)?
Every other shareholder in the target firm gains $_____per share. (Round to the nearest cent)