Arctic Blue Ltd. has issued capital of 100 million shares with a market capitalization of $800 million. The current financial position of the company is summarized as follows: The directors have resolved to fund a 10% share buy-back on a 1 for every 10 shares held by investors. Shares will be bought back at their market price. Contributed capital will be reduced proportionately with the balance coming from reserves. Assume no transaction costs associated with the buy-back and a company tax rate of 30%. Required: (a) Explain the changes that will be made to the balance sheet as a result of the buy-back