3. Katie Homes and Garden Co. has 10,640,000 shares outstanding. The stock is currently selling at $52 per share. If an unfriendly outside group acquired 25 percent of the shares, existing stockholders will be able to buy new shares at 30 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?

b. What will be the new purchase price for the existing stockholders?