Katie Homes and Garden Co. has 13,700,000 shares outstanding. The stock is currently selling at $60 per share. If an unfriendly outside group acquired 20 percent of the shares, existing stockholders will be able to buy new shares at 25 percent below the currently existing stock price. a. How many shares must the unfriendly outside group acquire for the poison pill to go into effect? (Do not round intermediate calculations.) Number of shares b. What will be the new purchase price for the existing stockholders? (Do not round intermediate calculations. Round your answer to 2 decimal places.) New purchase price S

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Katie Homes and Garden Co. has 13,700,000 shares outstanding. The stock is
currently selling at $60 per share. If an unfriendly outside group acquired 20
percent of the shares, existing stockholders will be able to buy new shares at 25
percent below the currently existing stock price.
a.
How many shares must the unfriendly outside group acquire for the poison pill
to go into effect? (Do not round intermediate calculations.)
Number of shares
b.
What will be the new purchase price for the existing stockholders? (Do not
round intermediate calculations. Round your answer to 2 decimal places.)
New purchase price
S
Transcribed Image Text:Katie Homes and Garden Co. has 13,700,000 shares outstanding. The stock is currently selling at $60 per share. If an unfriendly outside group acquired 20 percent of the shares, existing stockholders will be able to buy new shares at 25 percent below the currently existing stock price. a. How many shares must the unfriendly outside group acquire for the poison pill to go into effect? (Do not round intermediate calculations.) Number of shares b. What will be the new purchase price for the existing stockholders? (Do not round intermediate calculations. Round your answer to 2 decimal places.) New purchase price S
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