1. Firm D is an all-equity firm. It currently has a stock price of $20 with 10 million shares outstanding. It has $100 million cash and no debt. Suppose firm D uses its cash to repurchase shares. After the share repurchase, news will come out, and firm D's enterprise value will be either $150 million or $50 million, depending on whether the news is good or bad.
   1. What is Firm D's Enterprise Value before the share repurchase?
   2. What is Firm D's share price after the repurchase if the news is good, and what is firm D's share price after the repurchase if the news is bad?
   3. Suppose firm D decides to do the share repurchase after the news comes out. What is firm D's share price after the repurchase if the news is good? What is firm D's share price after the repurchase if the news is bad?
   4. Suppose firm D's CEO expects good news to come out, and the CEO wants to maximize firm D's ultimate share price (that is, the share price after the news comes out). Based on your answers to parts b and c, will the CEO undertake the repurchase before or after the news comes out?
   5. Suppose firm D's CEO expects bad news to come out, and the CEO wants to maximize firm D's ultimate share price. Based on your answers to parts b and c, will the CEO undertake the repurchase before or after the news comes out?
   6. Given your answer to part d and e, is stock purchase considered a positive signal to investors? First answer yes or no then explain why.

. Just the answers is fine