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Royeus, inc., a manufacturer of flesh memory. just reported that its main production facility in Tawan was destroyed in a fire. Athough the plant was

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Royeus, inc., a manufacturer of flesh memory. just reported that its main production facility in Tawan was destroyed in a fire. Athough the plant was fully insurod, the loss of prodotion wil decreate Roybun's froe cash fow by $176 million at the end of this year and by $63 milion at the end of next year. a. If Roybut has 35 milion shares outatanding and a weighted average cost of eapital of 12 . Th. What change in Roybus's stock price would you expoct upon this announcoment (Autume that the value of Roybus's debt is not aflected by the event) b. Would you expect to be able to sell Roybus stock on hearing this announcement and make a profit? Explan a. If Roybus has 35 militon shares outstanding and a weighted average cost of capital of 12.7%, what change in Roybus's stock price would you expect upan this anmouncerient? iAssume that the value of Roybus's debt is not aflected by the event.) The change in grice per share would be 1 (Round to the nearest cent.)

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