A company has 1 million shares outstanding. 1 0 0 0 shares outstanding, in thousands ( 0
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Question:
A company has million shares outstanding.
shares outstanding, in thousands s
An activist investor acquires of the firm's million shares.
activist's ownership stake.
The current share price is $share
As a result, the CEO engages in an exclusionary self tender offer. Specifically, he offers
all shareholders other than the activist investor a premium for of their shares.
premium offered to nonactivist shareholders
fraction of nonactivist shares repurchased by company
Assue that all nonactivist shareholders take advantage of this exclusionary self tender offer.
As a result of the exculsionary self tender, what is the activist investor's change in wealth?
As a result of the exculsionary self tender, what is the total collective change in wealth to nonactivist investors?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0078034640
7th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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