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Smartworks is considering a potential buyout of Redwords. The manager of Smartworks believes that the value of Redwords will rise by 5 0 % if

Smartworks is considering a potential buyout of Redwords. The manager of Smartworks believes that the value of Redwords will rise by 50% if Smartworks purchases Redwords and changes its management. Redwords is a listed company with 10 million shares outstanding, and its share price is only $15 per share now. Smartworks is going to use a leveraged buyout with an offer of $20 per share to control Redwords. If Smartworks obtains 100% control of Redwords, the share price of Redwords after the leveraged buyout will be closest to:
110f15
swer
130
15
Select one:
a. $5.00
O b. $10.00
. $1.00
O d. $3.00

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