In addition to the fixed assets, the firm has (i) 1 million of excess cash at year 0, deposited in a non- interest-bearing bank account, and (ii) the opportunity to invest 11.5 million in year 2 in a project that subsequently yields 11.9 million in year 3. Therefore, in order to invest in the project, the firm needs to raise additional funds of 10.5 million. Your objective is to maximize the firms share price in year 3. a. (10 marks) Assume that you can raise 10.5 million by issuing new shares at a price of 8.11 per share before making the potential investment in year 2. If the value of the firms fixed assets is A = 12 million, would you issue shares and invest in the project or not? What if A = 6 million? b. (10 marks) Now assume that an investment banker informs you that you could use the 1 million of excess cash to repurchase shares at a price of 11.55 per share in year 1, and then raise the full 11.5 million needed to invest in the project by issuing new shares at a price of 8 per share in year 2. If the value of the firms existing assets A = 12 million, which of the following alternatives would you choose: (i) repurchase shares in year 1 and then do nothing in year 2, (ii) repurchase shares in year 1 and then issue new shares and invest in the project in year 2, (iii) do nothing in both years. How would your answers change if A = 6 million? What if A = 9 million?