13. Farah's Fashions (FF) will be worth $100 million or $120 million with equal probability in one year. FF is highly leveraged and has bonds outstanding promising to pay $90 million next year. FF is considering a risky project that will payoff $50 million or -S65 million with equal probability. Would FF's shareholders want you to engage in the risky project? What is the expected payoff to FF's existing shareholders? How would your answers change if the bondholders could convert the bond to 80% of FF's equity? 14. Cliff Corp. (CC) has an enterprise value (MV equity + debt-cash) of $330 million, $50 million in cash and $30 million in debt. CC has 10 million shares outstanding and is considering using its $50 million in cash to repurchase shares. What s CC's share price prior to the prior to the repurchase? How many shares will CC repurchase? Suppose news is released that increases enterprise value to $350 million immediately after the repurchase, then what is CC's new share price? If management knows about the news prior to the repurchase, should they repurchase before or after the news is released? (Ch 20) 15. What is the ex dividend dat