(1.5 + 1.5 marks) J.Ma Inc., (JMI) is an all-equity firm with 25 million shares outstanding. JMI has a current period cash flow of $200 million and expects future free cash flows of $87.5 million per year. Management plans to use the cash to expand the firm's operations, which in turn will be increase future free cash flows by 9%. JM's cost of capital is 10%. JMI may distribute the $200mn cash as a dividend if the expansion project is not undertaken. A member of JMI's board of directors suggests that JMI's stock price would be higher if they used the $200 million to repurchase shares instead of funding the expansion. Determine the stock price if JMI opts for (a) expansion (b) stock repurchase? Assume perfect markets