0 IBM just reported that a Tornado destroyed its massive factory in Kanas. The impact is to decrease its free cash flow by $181 million in one year and by $58 million at end of the following year. The cost of capital is 12.8%. a. If IBM has 40 million shares outstanding, what would you expect to happen to the share price upon this announcement. Assume this information was only revealed to the market at this announcement, and the value of its debt is not affected. If you think it will decrease, sign your answer as negative. If you think it will increase, sign your answer as positive. b. Would you expect to be able to make a profit by selling IBM's stock right after this announcement? Explain. a. The expected change in price per share: $. (Round to the nearest cent. If its a decrease, sign it negative) b. Would you expect to be able to make a profit by selling IBM's stock right after this announcement? Explain. (Select the best choice below.) O A. If this information is public, no trading profit should be possible because the stock price will immediately drop to reflect this news in an efficient market. OB. I should be able to profit by short selling the stock immediately and buying it once the market price has dropped. OC. Your broker will not handle this transaction on such short notice, so no trading profit is possible. OD. I should be able to earn excess profits by buying the stock immediately after the price drops on the news, and selling it in two years after the firm is fully recovered. Click to select your answer(s)