RATIONALITY AND STOCK PRICE EFFECTS - Assume that Disney does make a tender offer for its shares but pays $80 per share. What will happen to the value per share for the shareholders who do not sell back?
? The share price will drop below the pre-announcement price of $67.71.
? The share price will be between $67.71 and the fair value (above) of $78.61.
? The share price will be higher than $78.61.