You work for a leveraged buyout firm and are evaluating a potential buyout of Associated Steel. Associated Steel's stock price is $15 and it has 10 million shares outstanding. You believe that if you buy the company and replace its management, its value will increase by 50%. You are planning on doing a leveraged buyout of Associated Steel, and will offer $20 per share for control of the company.

a) Assuming you get 50% control of Associated Steel, what will be the price of the non-tendered shares? (3 marks)

b) Regarding your tender offer, shareholders will: A) not tender their shares since the post LBO price is higher than the offer price. B) not tender their shares since the post LBO price is higher than the current price. C) tender their shares since the post LBO price is higher than the offer price. D) tender their shares since the post LBO price is lower than the current price. Select one best option and provide explanations for your choice. (3 marks) c) Assuming you get 50% control of Associated Steel, calculate what your gain from this transaction will be. (4 marks)