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 sharerepurchase, news will come out that will changeAMC's enterprise value to either $600 million or $200 million. Suppose AMC management expects good news to come out. If management wants to maximize AMC's ultimate shareprice, will they undertake the repurchase before or after the news comesout? When would management undertake the repurchase if they expect bad news to comeout? What effect would you expect an announcement of a share repurchase to have on the stockprice?

To maximize its shareprice, when will AMC prefer to repurchaseshares?(Select the best choicebelow.)

A.Before either good or bad news comes out.

B.Before good news and after bad news comes out.

C.After good news and before bad news comes out.

D.After either good or bad news comes out.