1. Activist hedge fund Jana Partners took an 8% stake in Whole Foods after deterioration in the grocery chain's share price to force management turnover, limit the influence of UNFI as wholesale distribution partner, and push to sell the company.

a. True

b. False

2. P/E multiples can be used to benchmark or determine the potential acquisition price. What is the implied purchase price for Whole Foods per share using the industry average projected P/E multiple. Assumptions: EPS 2016 $1.55, projected industry average P/E multiple of 20x, EPS growth rate of 5%, 320 million shares outstanding at 9/25/2016, $42 per share price actually paid by Amazon.

a. $42.00

b. $28.65

c. $32.55

d. None

3. Comparing the P/E ratio for the industry peers of 20.0x to the implied P/E from the Amazon purchase price, Amazon paid a premium above the expected industry average to purchase Whole Foods.

a. True

b. False