4. (15 points) Short Answer: Answer each briefly: a. (5 pts) One argument in favor of share buybacks (purchasing treasury shares) is that they increase a company's stock price as reducing the number of shares outstanding leads to higher earnings per share in the future. Comment on this claim in the context of a Modigliani- Miller world. b. (5 pts) Consider a $1,000 face value high-yield note that promises to make 3 annual payments of $400. The yield to maturity on this note is 12.5% (APR). i. (4 pts) Determine the duration of this note today. ii. (1 pt) If market interest rates were to rise 1%, would this note's price would fall more or less than another security that had duration of 2.0 years? c. (5 pts) On November 21, 2020, Fed Ex announced its regular quarterly dividend. It said it will send a cash payment of S0.20 per share on January 2, 2021, to all shareholders of record on Friday December 12, 2020. Given that this dividend was in line with previous patterns, describe when, if at all, financial theory would predict there to be a reaction in the price of FedEx stock as a result of this dividend