Question 9(10 points). Century Aluminum Industries has 100 million shares outstanding, a current share price of $25, and no debt. Century Aluminum's management believes that the shares are under-priced, and that the true value is $30 per share. Century Aluminum plans to pay $250 million in cash to its shareholders by repurchasing shares. Management expects that very soon new information will come out that will cause investors to revise their opinion of the firm and agree with Century Aluminum's assessment of the firm's true value. 1) If Century Aluminum is able to repurchase shares prior to the market becoming aware of the new information regarding Century Aluminum's true value, then the number of shares outstanding following the repurchase is closest to A) 92 million B) 10 million C) 75 million D) 90 million Answer Explanation 2) Assume that Century Aluminum is not able to repurchase shares prior to the market becoming aware of the new information regarding Century Aluminum's true value. If Century Aluminum repurchases the shares following the release of the new information, then the number of shares outstanding following the repurchase is closest to: A) 92 million B) 90 millon C) 75 million D) 10 million Answer: Explanation