Katie Homes and Garden Co. has 13,500,000 shares outstanding.The stock is currently selling at $56 per share. If an unfriendlyoutside group acquired 15 percent of the shares, existingstockholders will be able to buy new shares at 25 percent below thecurrently existing stock price.
a. How many shares must the unfriendly outsidegroup acquire for the poison pill to go into effect? (Donot round intermediate calculations.)
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b. What will be the new purchase price for theexisting stockholders? (Do not round intermediatecalculations. Round your answer to 2 decimal places.)
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