What Is the Fully Diluted Offer Price (Equity Value) for a Tender

question 90

Essay

What is the fully diluted offer price (equity value) for a tender offer made to acquire a target whose pre-
tender shares are trading for $1.50 per share? The tender offer includes a 30% premium to the target's pre-tender share price. The target has basic shares outstanding of 70 million and 5 million options which may be converted into common shares at $1.60 per share.

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Definitions:

Placebos

Inactive substances or treatments used in controlled experiments to test the effectiveness of another substance or treatment.

Experimenter Bias

A process where the scientists conducting an experiment inadvertently influence the results, affecting the validity of the data collected.

Dependent Variables

In scientific research, the variable being tested and measured, expected to change in response to variations in the independent variable.

Representative Sample

A subset of a population that accurately reflects the members of the entire population.