The following question is meant to be simplified and does not include potential complexities that exist. Stick to the information in the question, while not introducing complicating factors into your argument. Show all work. Formula included. No Excel. It is announced by Company A that they and Company B are suing each other. There is a 50% chance that Company A will win and receive a payment of $500 million from Company B. Otherwise, Company B will win and receive $500 million from Company A. Ignore any other potential costs or fees associated with the lawsuit. At the time the lawsuit is announced: a. What will happen to the required return on the stock of Company A? Hint: think carefully and use CAPM to answer the question. b. What will happen to the expected cash flow of Company A? c. Based on your above answers, will the stock price go up, stay the same, go down, or is the effect ambiguous? The following question is meant to be simplified and does not include potential complexities that exist. Stick to the information in the question, while not introducing complicating factors into your argument. Show all work. Formula included. No Excel. It is announced by Company A that they and Company B are suing each other. There is a 50% chance that Company A will win and receive a payment of $500 million from Company B. Otherwise, Company B will win and receive $500 million from Company A. Ignore any other potential costs or fees associated with the lawsuit. At the time the lawsuit is announced: a. What will happen to the required return on the stock of Company A? Hint: think carefully and use CAPM to answer the question. b. What will happen to the expected cash flow of Company A? c. Based on your above answers, will the stock price go up, stay the same, go down, or is the effect ambiguous