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After the share repurchase, news will come out that will change AMC's enterprise value to either $650 million or $250 million. a. What is AMC's
After the share repurchase, news will come out that will change AMC's enterprise value to either $650 million or $250 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 answer to (d), what effect would you expect an announcement of a share repurchase to have on the stock price? Why? After the share repurchase, news will come out that will change AMC's enterprise value to either $650 million or $250 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 answer to (d), what effect would you expect an announcement of a share repurchase to have on the stock price? Why
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