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Roybus, Ine., a manufacturer of flash memory, just reported that its main production faclity in Tawan was destroyed in a fire. Although the plant was

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Roybus, Ine., a manufacturer of flash memory, just reported that its main production faclity in Tawan was destroyed in a fire. Although the plant was fully insured, tre loss of production will decrease Roybus's free cash flow by $182 milion at the end of this year and by $62 million at the ond of next year. a. If Roybus has 31 milion shares outstanding and a weighted average cost of capital of 13.5%, what change in Roybus's stock price would you expect upon this announcement? (Assume that the value of Roybus's debt is not affected by the event.) b. Would you expect to be able to sell Roybus stock on hearing this announcement and make a proff? Explain. a. If Roybus has 31 mulion shares outstanding and a woightsed avorage cost of capital of 13.5%, what change in Roybus's stock price would you expect upen this announcement? (Assume that the value of Roybus's debt is not affected by the event) The change in price per share would be \& (Round to the nearest cent)

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