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Howwouldyouranswerto(4)changeifyoualsoassumethat(i)theinheritancetaxowedonFredericKohlersestatewas50.2%ofhisholdingsinKohlerCo.(equivalentto489sharesoutofthe975heowned);(ii)thetaxespaidbytheestateamountedto$27million(489sharesat$55,400each),(iii)werethesettlementorthetrialtoresultinarevisedsharepriceinexcessof$55,400,theIRSwouldlikelydemandasimilarvaluationforitsclaimonFredericsestate;and(iv)HerbertKohlerestimatestheprobabilityoftheIRSsdemandat100%ifhegoestotrialand50%ifhesettles. Note : assume legal fees can be ignored and Herbert Kohler, the dissenters and the IRS all have the same cost of capital. Assume

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  1. Howwouldyouranswerto(4)changeifyoualsoassumethat(i)theinheritancetaxowedonFredericKohlersestatewas50.2%ofhisholdingsinKohlerCo.(equivalentto489sharesoutofthe975heowned);(ii)thetaxespaidbytheestateamountedto$27million(489sharesat$55,400each),(iii)werethesettlementorthetrialtoresultinarevisedsharepriceinexcessof$55,400,theIRSwouldlikelydemandasimilarvaluationforitsclaimonFredericsestate;and(iv)HerbertKohlerestimatestheprobabilityoftheIRSsdemandat100%ifhegoestotrialand50%ifhesettles.

Note : assume legal fees can be ignored and Herbert Kohler, the dissenters and the IRS all have the same cost of capital. Assume any interest charges are offset by the value for Herbert Kohler of paying late.

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