(Please do not submit an answer unless you're sure its the correct one)

Hors dAge Cheeseworks has been paying a regular cash dividend of $4.15 per share each year for over a decade. The company is paying out all its earnings as dividends and is not expected to grow. There are 120,000 shares outstanding selling for $83 per share. The company has sufficient cash on hand to pay the next annual dividend.

Suppose that, starting in year 1, Hors dAge decides to cut its cash dividend to zero and announces that it will repurchase shares instead.

A-What is the immediate stock price reaction? Ignore taxes, and assume that the repurchase program conveys no information about operating profitability or business risk.

B-How many shares will Hors dAge purchase?

C-Project and compare future stock prices for the old and new policies.

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Share Price \begin{tabular}{|c|c|c|} \hline Year & Old Policy & New Policy \\ \hline 1 & & \\ \hline 2 & & \\ \hline 3 & & \\ \hline \end{tabular}