Firm A is not very well managed. The price of the stock is $42, and the firm has 3 million shares.

Raiders are interested in acquiring the firm to make it more profitable, however, firm A has a poison pill that would be triggered at 20%.

If triggered, the current shareholders except the raider will be able to buy additional shares of the firm at a 40% discount.

If the raider reaches the 20% acquisition of firm A:

a/ How many new shares will be issued and at what price if all shareholders except the raiders buy the additional share?

b/ What will be the new percentage ownership of the raider?

c/ What is the new price of the stock?

d/ Which one profits from the operation?