Elle is a financial analyst in Smith and T Co. As part of her analysis of the annual distribution policy and its impact on the firm's value, she makes the following calculations and observations: The company generated a free cash flow (FCF) of $81 million in its most recent fiscal year. The firm's cost of capital (WACC) is 13%. The firm has been growing at 10% for the past six years but is expected to grow at a constant rate of 8% in the future The firm has 20.25 million shares outstanding. The company has $216 million in debt and $135 million in preferred stock. Along with the rest of the finance team, Elle has been part of board meetings and knows that the company is planning to distribute $120 million, which is invested in short-term investments, to its shareholders by buying back stock from its shareholders. Elle also observed that, at this point, apart from the $120 million in short-term investments, the firm has no other nonoperating assets. Using results from Elle's calculations and observations, solve for the values in the following tables. Select the best answer provided in the selection list. Value Value $1,749.60 million Value of the firm's operations Intrinsic value of equity immediately prior to stock repurchase Intrinsic stock price immediately prior to the stock repurchase Number of shares repurchased Intrinsic value of equity immediately after the stock repurchase Intrinsic stock price immediately after the stock repurchase $81.68 Based on your understanding of stock repurchases, identify whether the following statement is true or false: When firms make distributions in the form of dividends, the stock price falls by the value of dividends per share (DPS) distributed, but the overall shareholder wealth does not decrease. This statement is True because if a firm pays a dividend of $1 per share, the price per share of the firm's stock will also fall by $1 to any arbitrage opportunities. Value Value Value of the firm's operations Intrinsic value of equity immediately prior to stock repurchase Intrinsic stock price immediately prior to the stock repurchase $14,580.00 million $1,749.60 million $1.620.00 million $145.80 million Number of shares repurchased Intrinsic value of equity immediately after the stock repurchase Intrinsic stock price immediately after the stock repurchase 1.28 million 2.08 million 1.60 million 2.72 million Value $14,460.00 million $1,404.00 million $1,500.00 million $1.399.00 million Value Value Value of the firm's operations Number of shares repurchased Intrinsic value of equity immediately prior to stock repurchase $1,735 million Intrinsic value of equity immediately $1,519 million after the stock repurchase Intrinsic stock price immediately $1.654 million Intrinsic stock price immediately prior to the stock repurchase $1.399 million after the stock repurchase Value Value of the firm's operations Number of shares repurchased Intrinsic value of equity immediately Intrinsic value of equity immediately prior to stock repurchase after the stock repurchase Intrinsic stock price immediately $81.68 Intrinsic stock price immediately prior to the stock repurchase $85.68 after the stock repurchase $69.09 $81.68 $25.01 Based on your understanding of stock repurchases, identify whether the following statement is true or false: $85.68 $69.09 $25.01 581.68 When firms make distributions in the form of dividends, the stock price falls by the value of dividends per share (DPS) distributed, but the overall shareholder wealth does not decrease. This statement is True because if a firm pays a dividend of $1 per share, the price per share of the firm's stock will also fall by $1 to ar True le opportunities. False Based on your understanding of stock repurchases, identify whether the following statement is true or false: When firms make distributions in the form of dividends, the stock price falls by the value of dividends per share (DPS) distributed, but the overall shareholder wealth does not decrease. This statement is True because if a firm pays a dividend of $1 per share, the price per share of the firm's stock will also fall by $1 to any arbitrage opportunities encourage avoid Elle is a financial analyst in Smith and T Co. As part of her analysis of the annual distribution policy and its impact on the firm's value, she makes the following calculations and observations: The company generated a free cash flow (FCF) of $81 million in its most recent fiscal year. The firm's cost of capital (WACC) is 13%. The firm has been growing at 10% for the past six years but is expected to grow at a constant rate of 8% in the future The firm has 20.25 million shares outstanding. The company has $216 million in debt and $135 million in preferred stock. Along with the rest of the finance team, Elle has been part of board meetings and knows that the company is planning to distribute $120 million, which is invested in short-term investments, to its shareholders by buying back stock from its shareholders. Elle also observed that, at this point, apart from the $120 million in short-term investments, the firm has no other nonoperating assets. Using results from Elle's calculations and observations, solve for the values in the following tables. Select the best answer provided in the selection list. Value Value $1,749.60 million Value of the firm's operations Intrinsic value of equity immediately prior to stock repurchase Intrinsic stock price immediately prior to the stock repurchase Number of shares repurchased Intrinsic value of equity immediately after the stock repurchase Intrinsic stock price immediately after the stock repurchase $81.68 Based on your understanding of stock repurchases, identify whether the following statement is true or false: When firms make distributions in the form of dividends, the stock price falls by the value of dividends per share (DPS) distributed, but the overall shareholder wealth does not decrease. This statement is True because if a firm pays a dividend of $1 per share, the price per share of the firm's stock will also fall by $1 to any arbitrage opportunities. Value Value Value of the firm's operations Intrinsic value of equity immediately prior to stock repurchase Intrinsic stock price immediately prior to the stock repurchase $14,580.00 million $1,749.60 million $1.620.00 million $145.80 million Number of shares repurchased Intrinsic value of equity immediately after the stock repurchase Intrinsic stock price immediately after the stock repurchase 1.28 million 2.08 million 1.60 million 2.72 million Value $14,460.00 million $1,404.00 million $1,500.00 million $1.399.00 million Value Value Value of the firm's operations Number of shares repurchased Intrinsic value of equity immediately prior to stock repurchase $1,735 million Intrinsic value of equity immediately $1,519 million after the stock repurchase Intrinsic stock price immediately $1.654 million Intrinsic stock price immediately prior to the stock repurchase $1.399 million after the stock repurchase Value Value of the firm's operations Number of shares repurchased Intrinsic value of equity immediately Intrinsic value of equity immediately prior to stock repurchase after the stock repurchase Intrinsic stock price immediately $81.68 Intrinsic stock price immediately prior to the stock repurchase $85.68 after the stock repurchase $69.09 $81.68 $25.01 Based on your understanding of stock repurchases, identify whether the following statement is true or false: $85.68 $69.09 $25.01 581.68 When firms make distributions in the form of dividends, the stock price falls by the value of dividends per share (DPS) distributed, but the overall shareholder wealth does not decrease. This statement is True because if a firm pays a dividend of $1 per share, the price per share of the firm's stock will also fall by $1 to ar True le opportunities. False Based on your understanding of stock repurchases, identify whether the following statement is true or false: When firms make distributions in the form of dividends, the stock price falls by the value of dividends per share (DPS) distributed, but the overall shareholder wealth does not decrease. This statement is True because if a firm pays a dividend of $1 per share, the price per share of the firm's stock will also fall by $1 to any arbitrage opportunities encourage avoid