Imagine you are the CEO of a cellphone manufacturer, Rushcorp, which is a publicly listed company. The share price for Rushcorp is $40 per share.

(a) If you combine your business with Futurecorp, a private firm that designs operating systems for cellphones, what is the terminology for this type of merger? (1 mark)

(b) Suppose you find that Futurecorp does not have a staggered board. Explain what the staggered board is and whether you will be more or less confident about selecting Futurecorp as your target. (4 marks)

(c) You have decided to acquire Bluecorp, which is a publicly listed company, because you believe there is a substantial synergy in the combination of Rushcorp and Bluecorp. You make an announcement that you will pay a 40% premium to acquire Bluecorp. Right after the announcement of the transaction, the stock price of Bluecorp only increases by 15%. Explain this phenomenon from the perspective of the Board of Directors for the target company. (3 marks)