Question: Look again at Problem 3. Assume instead that the CFO announces a stock repurchase of $4 per share instead of a cash dividend. a. What

Look again at Problem 3. Assume instead that the CFO announces a stock repurchase of $4 per share instead of a cash dividend.
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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