1. CMA Ltd currently has an enterprise value (that is, present value of future free cash flows) of $400 million and $100 million in excess cash. The firm has 10 million shares outstanding and no debt. Suppose CMA uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMC's enterprise value to either $600 million or $200 million. Suppose CMA waits until after the news comes out to do the share repurchase. What is CMA's share price after the repurchase if its enterprise value goes up? What is CMA's share price after the repurchase if its enterprise value declines? The share price after the repurchase if its enterprise value goes up is $ . (Round to two decimal places.) b. Suppose CMA management expects good news to come out. Based on your earlier answers, if management desires to maximize CMA'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? c. Given your answer to part b what effect would you expect an announcement of a share repurchase to have on the stock price? Why