1.
2.	In cell D21, by using cell references, calculate the companys share price prior to the share repurchase (1 pt.).
3.	In cell D25, by using cell references, calculate the number of shares that can be repurchased with the excess cash (1 pt.).
4.	In cell D26, by using cell references, calculate the companys share price after the share repurchase if its enterprise value goes up (1 pt.).
5.	In cell D27, by using cell references, calculate the companys share price after the share repurchase if its enterprise value goes down (1 pt.).
6.	In cell D31, by using cell references, calculate the companys share price after the announcement (but before the share repurchase) if its enterprise value goes up (1 pt.).
7.	In cell D32, by using cell references, calculate the companys share price after the announcement (but before the share repurchase) if its enterprise value goes down (1 pt.).
8.	In cell I36, type either before or after (lowercase). (1 pt.).
9.	In cell I39, type either before or after (lowercase). (1 pt.).
10.	In cell D44, type either increase or decrease (lowecase) (1 pt.).
11.	Save the workbook. Close the workbook and then exit Excel. Submit the workbook as directed.

AMC Corporation currently has an enterprise value of $400 million and $100 million in excess cash. The firm has 10 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMCs enterprise value to either $600 million or $200 million.
								a.	What is AMCs share price prior to the share repurchase?
b.	What is AMCs share price after the repurchase if its enterprise value goes up? What is AMCs share price after the repurchase if its enterprise value declines?
c.	Suppose AMC waits until after the news comes out to do the share repurchase. What is AMCs share price after the repurchase if its enterprise value goes up? What is AMCs share price after the repurchase if its enterprise value declines?
d.	Suppose AMC management expects good news to come out. Based on your answers to parts (b) and (c), if management desires to maximize AMCs ultimate share price, will they undertake the repurchase before or after the news comes out? When would management undertake the repurchase if they expect bad news to come out?
e.	Given your answers to part (d), what would you expect an announcement of a share repurchase prior to the news to have on the stock price? Why?
	Enterprise value before
	announcement (million)	$400
	Excess cash (million)	$100
	Shares outstanding (million)	10
	High enterprise value (million)	$600
	Low enterprise value (million)	$200
a.	What is AMCs share price prior to the share repurchase?
	Share price before repurchase
b.	What is AMCs share price after the repurchase if its enterprise value goes up? What is AMCs share price after the repurchase if its enterprise value declines?
	Shares to repurchase (million)
	High share price post repurchase
	Low share price post repurchase
c.	Suppose AMC waits until after the news comes out to do the share repurchase. What is AMCs share price after the repurchase if its enterprise value goes up? What is AMCs share price after the repurchase if its enterprise value declines?
	High share price post repurchase
	Low share price post repurchase
d.	Suppose AMC management expects good news to come out. Based on your answers to parts (b) and (c), if management desires to maximize AMCs ultimate share price, will they undertake the repurchase before or after the news comes out? When would management undertake the repurchase if they expect bad news to come out?
	If management expects the news to be good, it will benefit shareholders if they repurchase
	the news is released.
	If management expects the news to be bad, it will benefit shareholders if they repurchase
	the news is released.
e.	Given your answers to part (d), what would you expect an announcement of a share repurchase prior to the news to have on the stock price? Why?
	You would expect the share price to		, because the announcement will mean that good news
	is about to be released.

AMC Corporation currently has an enterprise value of $400 milion and $100 million in excess cash. The firm has 10 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares After the share repurchase, news wil come out that will change AMC's enterprise value to either $600 million or $200 million. a. What is AMC's share price prior to the share repurchase? b. What is AMC's share price after the repurchase if its enterprise value goes up? What is AMC's share price after the repurchase if its enterprise value declines? c. Suppose AMC waits until after the news comes out to do the share repurchase. What is AMC's share price after the repurchase if its enterprise value goes up? What is AMC's share price after the repurchase if its enterprise value declines? d. Suppose AMC management expects good news to come out. Based on your answers to parts (b) and (c), if management desires to maximize AMC's ultimate share price, will they undertake the repurchase before or after the news comes out? When would management undertake the repurchase if they expect bad news to come out? e. Given your answers to part (d), what would you expect an announcement of a share repurchase prior 10 to the news to have on the stock price? Why? 12 13 14 15 16 17 18 Enterprise value before announcement (million) Excess cash (million) Shares outstanding (million) High enterprise value (million) Low enterprise value (million) S400 S100 10 S600 S200