Use the Following Information to Answer the Question(s)below

question 24

Multiple Choice

Use the following information to answer the question(s) below.
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.
-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.

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Definitions:

Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.

Panama Canal

A man-made waterway in Panama that connects the Atlantic Ocean with the Pacific Ocean, significantly reducing the maritime journey time by avoiding the lengthy southern tip of South America.

Treaties

Formal agreements between countries that define and modify their mutual duties and obligations.

Panama

A country in Central America, located at the junction of North and South America, known for the Panama Canal which connects the Atlantic and Pacific Oceans.