Question1 a) Levy AG currently has 20,000 cash and 155,000 fixed assets in market value terms. The market value of the equity is 175,000 with 5,000 shares outstanding. The company has declared a dividend of 1.50 per share. The equity goes ex-dividend tomorrow. Ignoring any tax effects, what are the shares selling for today? What will they sell for tomorrow? What will the market value balance sheet look like after the dividends are paid? b) Suppose Levy has announced it is going to repurchase 4,025 worth of equity. What effect will this transaction have on the equity of the firm? How many shares will be outstanding? What will the price per share be after the repurchase? Ignoring tax effects, show how the share repurchase is effectively the same as a cash dividend