please I need step by step .As soon as possible. Thanks

94 Foundation Case 27 optrol of the company way. this was an unlikely d products that others in h might wish to acquire takeover offer were to be made, they could be voted out of control of the co While in the early stages of the development of the company, this was an ula event, such was no longer the case. The company now had products that och the biotech industry such as Biogen, Cygnus, and Genelech might wish to through a takeover. Most of these firms had their own high quality scientists could quickly relate to the products being developed by Dr. Menger and Al Biogenetics. Dr. Menger was particularly concerned because the year 2017 was not likel be as good as prior ones and could make the company's stockholders a little happy with its performance Management was about to settle a lawsuit against the firm that could have adverse consequences in the year 2017. Also, the firm intendo to replace its computer system and certain write-offs related to this were inevita in the year 2017. Dr. Menser expressed his concern to Bill Larson, who was a partner in the investment banking firm of Caruthers, Larson, and Rosen. Larson had been heavily involved in the initial public offering in 2013 of Alpha Biogenetics when his firm was the lead underwriter. In response to Dr. Menger's concerns about an unfriendly takeover. Larsen suggested the possibility of a poison pill. He said that poison pill provisions were used by over half the public corporations in the U.S. to thwart potentially unfriendly takeovers. Poison pills could take many different forms, but Larson suggested that controlling inside stockholders be allowed to purchase up to 1,500,000 new shares in the firm at 70 percent of current market value if an outside group acquired 25 percent or more of the current shares outstanding. This provision could discourage a potential takeover offer as we shall see. Furthermore, Larson explained that poison pills do not require the approval of shareholders to implement as is true of other forms of anti-takeover amendments. Annual Meeting At the firm's 2016 annual meeting, Dr. Menger discussed the firm's financial performance for 2016 as well as seven other items on the agenda, including the election of members of the board of directors, the approval of the firm's auditors from Deloitte & Touche, LLP, and the announcement of the poison pill provision that the firm planned to implement in the next two months. Dr. Menger was somewhat surprised at the strong reaction that he got on the latter item. An institutional stockholder that represented the Califomia Public Employees Retirement System (CALPERS) said her multibillion dollar pension fund was really turned off by poison pill provisions, and that other large institutional investors felt the same way. She said that the role of corporate management was to maximize stockholder wealth and those anti-takeover provisions, such as poison pills, tended to discourage tender offers to purchase firms at premiums over current market value. a blogenetics Poison P Apha Blogenetics po to the current, m urity and show She further stated that poison pills tended to protect current management against the threat of being displaced and therefore gave them a feeling of security that sometimes lead to poor decisions encouraged usually high compensation packages, and even potential laziness. There was a hush in the room after she finished her remarks. Dr. Menger felt compelled to answer her charges and stated that the raison pill provision was not intended to protect poor performance, but was being put into place to provide a sense of permanency to the current management. He wid that if management became overly concemed with job security and short-term quarter to quarter perfomance, they would not take a lone-term perspective that was essential to building a company for the future. As an example he suggested that R& D expenditures might be cut back to beef up a quarterly earnings report. He also said that a sense of security and permanency allowed the company to compete for top notch scientists and managers who otherwise would be hesitant to give up their current positions to go to a company that was a takeover target. Bill Larson, the firm's investment banker, also got into the discussion. He said that while in certain instances poison pills thwarted potential stockholder value maximizing offers; in other cases it had the opposite effect. Because the company was protected against capricious or minimal takeover offers, companies that wanted to acquire firms with poison pill provisions tended to offer a premium price well above the average offer. This was necessary because the firm could easily deflect a normal offer. As Dr. Menger took all these comments in, he decided to have one last meeting with his executive committee on the topic of implementing a poison pill provision Required 1. What were the earnings per share and the P/E ratio in the year that the firm went public (2013)? 2. Assuming a five percent underwriting spread, and $120,000 in out-of-pocket costs, what were the net proceeds to the corporation? 3. What rate of return did the Scientific Venture Capital Fund eam on its $4 million investment? Does this appear to be reasonable? 4. What were earnings per share in 2016? Based on the stock price of $33.60, what was the P/E ratio? 5. Under the poison pill provision, how much would it cost an unfriendly outside party to acquire 25 percent of the shares outstanding at the 2016 stock price? 6. Now assume an unfriendly, outside party acquired all the shares not owned by the inside control group: How many shares must the inside control group buy from the corporation to maintain its majority position? What would the total dollar cost be? 7. Based on the pro and con arguments made at the annual meeting, do you think that poison pills are in the best interest of stockholders? Please give your opinion on this because there is no one correct