Look again at Problem 3. Assume instead that the CFO announces a stock repurchase of $4 per
Question:
a. What happens to the stock price when the repurchase is announced? Would you expect the price to increase to $90? Explain briefly.
b. Suppose the stock is repurchased immediately after the announcement. Would the repurchase result in an additional stock-price increase?
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a The announcement of a share repurchase is not a commitment to conti...View the full answer
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Related Book For 
Principles of Corporate Finance
ISBN: 978-1259144387
12th edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen
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