Suppose Summa Industries and Cumma Technology have identical assets that generate identical cash flows. Summa Industries is anall-equity firm, with 10 million shares outstanding that trade for a price of $22.00 per share. Cumma Technology has 19 million sharesoutstanding, as well as debt of $66.00 million.

a. According to MM PropositionI, what is the stock price for Cumma Technology?

b. Suppose Cumma Technology stock currently trades for $13.64 per share. What arbitrage opportunity isavailable? What assumptions are necessary to exploit thisopportunity?

a. According to MM PropositionI, what is the stock price for Cumma Technology?

According to MM PropositionI, the stock price per share for Cumma Technology is $

8.1

8.1. (Round to the nearestcent.)

b. Suppose Cumma Technology stock currently trades for $13.64 per share. What arbitrage opportunity isavailable? What assumptions are necessary to exploit thisopportunity?

If Cumma Technology stock currently trades for $13.64 pershare, an example of an arbitrage opportunity that exists today which requires no future cash flow obligations wouldbe:(Select from thedrop-down menus and round to two decimal places

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