Companies reward their shareholders in two main ways-by paying dividends or by buying back shares of stock. An increasing number of blue chips, or well-established companies, are doing both. Paying dividends and stock buybacks make a potent combination that can significantly boost shareholder returns. LPC Corporation has $800 million of fixed assets and $200 million in excess cash. The firm has 20 million shares outstanding and no debt. Suppose LPC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change LPC's fixed asset value to either $1200 million (good news) or $400 million (bad news) i) Evaluate under which conditions an increase in the dividend payment can be interpreted as a signal of good news or bad news. (5 marks) ii) Analyse how an announcement of a share repurchase is considered a positive signal (5 marks) iii) Suppose LPC management expects good news to come out. If management desires to maximize LPC's ultimate share price, suggest whether they should undertake the repurchase before or after the news comes out? (4 marks) iv) Recommend when would management undertake the repurchase if they expect bad news to come out? (4 marks) v) Rationalise the effect would you expect an announcement of a share repurchase to have on the stock price. (3 marks) vi) Deduce the impact of an announcement of a share repurchase to have on the stock price for LPC. (4 marks)