Because of a Catastrophic Plane Crash,the FAA Announced That It

question 5

Multiple Choice

Because of a catastrophic plane crash,the FAA announced that it is withdrawing its air worthiness certification for Fly by Night Aviation's (FBNA) new four-seat private plane.As a result,FBNA's future expected free cash flows will decline by $40 million a year for the next eight years.FBNA has 20 million shares outstanding,no debt,and an equity cost of capital of 12%.If this news is a complete surprise to investors,then the amount that FBNA's stock price should fall upon the announcement is closest to:

• A)$2.00.
• B)$16.00.
• C)$16.70.
• D)$9.90.

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Definitions:

Roles

The functions or parts played by individuals or entities in a particular situation or context.

Leader

An individual who guides or directs a group towards achieving a common goal, often inspiring and motivating others.

WebEx

An online meeting, video conferencing, and collaborative technology platform, commonly used for virtual business meetings and webinars.

Informational Dimensions

Dimensions of group work focusing on the problem, data, and possible solutions.