Suppose an all-equity financed company has 400,000 shares of stock currently outstanding. Each

share currently has a true value of $40. Suppose the company uses internal cash to repurchase

100,000 shares of stock.

What will the effect on the true value of each share be if the company

repurchases shares at a price of $50 per share?

What will the effect on the true value of each share

be if the company repurchases shares at a price of $40 per share?

What will the effect on the true

value of each share be if the company repurchases shares at a price of $30 per share?