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2.1 About 14 April 2022, two things happened. Firstly, Twitters board announced a flip-in poison pill to take effect if Elon Musk (or any other

2.1

About 14 April 2022, two things happened. Firstly, Twitters board announced a flip-in poison pill to take effect if Elon Musk (or any other investor) tried to purchase more than 15% of Twitters shares without the boards approval. Secondly, Elon Musk announced an offer to buy all Twitter shares at $54.20 each.

How did Twitters share price and trading volume react to this news of 14 April 2022? Calculate the percentage change (if any) and explain possible reason(s) for any observed changes.

2.2

Explain what a flip-in poison pill is, when it should be used, what it is intended to achieve, and critically discuss if it was the right decision at the right time by Twitters board.

2.3

How much of a premium above the trading value of Twitters shares was Musks offer of $54.20 per share? Why is it usual in such circumstances to offer a price higher than the trading value?

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