Roybus, Inc., a manufacturer of flash memory, just reported that its main production facility in Taiwan was destroyed in a fire. While the plant was fully insured, the loss of production will

decrease Roybus's free cash flow by $$177$ million at the end of this year and by $$61$ million at the end of next year.

a$.$ If Roybus has $35$ million shares outstanding and a weighted average cost of capital of $12\mathrm{.}6\%,$ what change in Roybus's stock price would you expect upon this announcement? $($Assume that

the value of Roybus' debt is not affected by the event.$)$

b$.$ Would you expect to be able to sell Roybus's stock on hearing this announcement and make a profit? Explain.

a$.$ If Roybus has $35$ million shares outstanding and a weighted average cost of capital of $12\mathrm{.}6\%,$ what change in Roybus's stock price would you expect upon this announcement? $($Assume that

the value of Roybus' debt is not affected by the event.$)$

The change in price per share would be $$.($Round to the nearest cent.$)$