Stock price would you expect upon this announcement

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Reference no: EM131851206

Roybus, Inc., a manufacturer of flash memory, just reported that its main production facility in Taiwan was destroyed in a fire. Although the plant was fully insured, the loss of production will decrease Roybus's free cash flow by $ 176 million at the end of this year and by $ 63 million at the end of next year. a. If Roybus has 31 million shares outstanding and a weighted average cost of capital of 13.3 %, what change in Roybus's stock price would you expect upon this? announcement (Assume that the value of Roybus's debt is not affected by the event.) b. Would you expect to be able to sell Roybus stock on hearing this announcement and make a profit Explain. a. If Roybus has 31 million shares outstanding and a weighted average cost of capital of 13.3 %, what change in Roybus's stock price would you expect upon this announcement (Assume that the value of Roybus's debt is not affected by the event.) The change in price per share would be $nothing. (Round to the nearest cent.)

Reference no: EM131851206

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