Hors dAge Cheeseworks has been paying a regular cash dividend of $3.60 per share each year for over a decade. The company is paying out all its earnings as dividends and is not expected to grow. There are 114,000 shares outstanding selling for $60 per share. The company has sufficient cash on hand to pay the next annual dividend. Suppose that, starting in year 1, Hors dAge decides to cut its cash dividend to zero and announces that it will repurchase shares instead.

b. How many shares will Hors dAge re-purchase? (Round your answer to the nearest whole number.) (answer is not 6840)

c. Project and compare future stock prices for the old and new policies. (Do not round intermediate calculations. Round your old policy answers to the nearest whole number and your new policy answers to 2 decimal places.)

Share Price Old Policy New Policy Year 1 2 3 3 Share Price Old Policy New Policy Year 1 2 3 3