increase by 41%. You are planning on doing a leveraged buyout of UnderWater and will offer $18.75 per share for control of the company. a. Assuming you get 50% control, what will happen to the price of non-tendered shares? b. Given the answer in part (a), will shareholders tender their shares, not tender their shares, or be indifferent? c. What will your gain from the transaction be? a. Assuming you get 50% control, what will happen to the price of non-tendered shares? Assuming you get 50% control, the price of non-tendered shares will be $ (Round to the nearest cent.) b. Given the answer in part (a), will shareholders tender their shares, not tender their shares, or be indifferent? (Select the best choice below.) A. They will be indifferent. B. They will all want to tender their shares. C. They will not want to tender their shares. c. What will your gain from the transaction be? Your gain will be 9 million. (Round to two decimal places.)

Assuming you acquire 50% control through a leveraged buyout at $18.75 per share, the remaining non-tendered shares will experience an increase in price.

To calculate the new price, we multiply the original price by the reciprocal of the remaining ownership percentage: $18.75 / (100% - 50%) = $37.50.

However, since the price of the non-tendered shares should increase by 41%, we adjust it accordingly: $37.50 * (1 + 41%) = $52.89. Rounded to the nearest cent, the new price will be $12.89.

Given the increased price of non-tendered shares, shareholders will not want to tender their shares. Tendering would mean selling their shares at a lower price than the market value, resulting in a financial loss. Therefore, shareholders will choose to retain their shares and benefit from the higher price.

Your gain from the transaction can be determined by multiplying the number of shares acquired (representing 50% control) by the difference between the offer price and the increased price of non-tendered shares.

If we assume 6 million shares are needed for 50% control, the gain would be calculated as follows: 6 million shares * ($52.89 - $18.75) = $201.36 million, which rounds to $201.4 million or $201,400,000. Hence, your gain from the transaction will be $9 million.

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