Spotify is currently trading at $150 per share and has 200 million shares outstanding.

Carl Icahn thinks that he can increase the company's value by buying it and replacing

the current management. Suppose that Spotify has a poison pill with a 10% trigger.

If it is triggered, then current shareholders can buy one new share for each share they

own at a 25% discount. Assume that Carl Icahn's ownership in Spotify just crossed

the 10% threshold.

a. How many new shares will be issued to existing shareholders and at what price?

Assume that all current shareholders buy the discounted shares.

b. What happens to Carl Icahn's percentage ownership of Spotify?

c. What is the price of Spotify shares after the new shares are issued?

d. Did Carl Icahn gain or lose from triggering the poison pill? Did the current

shareholders gain or lose from purchasing additional shares? Why?