XARS Companys stock price is $24, and the firm has 2.5 million shares outstanding. You believe you can increase the companys value if you buy it and replace the management. Assume that XARS has a poison pill with a 20% trigger. If it is triggered, all XARSs shareholdersother than the acquirerwill be able to buy one new share in XARS for each share they own at a 50% discount. Assume that the price remains at $20 while you are acquiring your shares. If XARSs management decides to resist your buyout attempt, and you cross the 20% threshold of ownership:

a. How many new shares will be issued and at what price? (5 marks)

b. What will happen to your percentage ownership of XARS? (5 marks)

c. What will happen to the price of your shares of XARS? (5 marks)

d. Do you lose or gain from triggering the poison pill? If you lose, where does the loss go (who benefits)? If you gain, from where does the gain come (who loses)? (5 marks)