Problem 1. Cheeseworks Inc. has been paying a regular cash dividend of $4 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 100,000 shares outstanding selling for $80 per share. The company has sufficient cash on hand to pay the next annual dividend. Suppose that the company 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 Cheeseworks purchase in the first year of the repurchase program? What will be the stock price after this repurchase? (c) Project and compare future stock prices for the old and new policies. Do this for years 1, 2, and 3 [i.e., make a table and list total assets, earnings, (old and new) number of shares, (old and new) price per share, and number of shares purchased for each year]