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Hors d’Age Cheeseworks has been paying a regular cash dividendof $4.80 per share each year for over a decade. The company ispaying out all its earnings as dividends and is not expected togrow. There are 111,000 shares outstanding selling for $80 pershare. The company has sufficient cash on hand to pay the nextannual dividend at t = 1.Suppose that, starting in year 1, Hors d’Age decides to cut itscash dividend to zero and announces that it will repurchase sharesinstead.a. What is the immediate stock price reaction?Ignore taxes, and assume that the repurchase program conveys noinformation about operating profitability or business risk.IncreaseDecreaseRemain the sameb. How many shares will Hors d’Age purchase?(Round your answer to the nearest wholenumber.)Number of shares repurchased c. Project and compare future stock prices forthe old and new policies. (Do not round intermediatecalculations. Round your old policy answers to the nearest wholenumber and your new policy answers to 2 decimalplaces.Share PriceYearOld PolicyNew Policy1$$2$$3$$