Question 5. (12 marks) Bidder Co. has 1 million shares outstanding, each of which has a price of $20. It has made a takeover offer of Target Co. which has 1 million shares outstanding and a price per share of $2.50. Assume that the takeover will occur with certainty and all market participants know this. Furthermore, there are no synergies to merging the two firms. a. Assume Bidder Co. made a cash offer to purchase Target Co. for $3 million. What happens to the price of each firm on the announcement? What premium over the current market price does this offer represent? (3 marks) b. Assume Bidder Co. makes a stock offer with an exchange ratio of 0.15. What happens to the price of each firm? What premium over the current market price does this offer represent? (3 marks) c. At current market prices, both offers are offers to purchase Target Co. for $3 million. Does that mean that your answers to parts (a) and (b) must be identical? Explain. (2 mark) d. Name and explain at least two anti-takeover provisions that the Target Co. could use. (4 marks)