Apex Analytics Is an All-Equity Firm with 50 Million Shares

Multiple Choice

Apex Analytics is an all-equity firm with 50 million shares outstanding.Apex has $30 million in cash,and expects future free cash flows of $8 million per year.The cash can be used to expand the firm's future operations,increasing future free cash flows to $10 million per year.If Apex's cost of capital for the expansion is 8%,what will be the difference in the firm's share price compared to using the cash for a share repurchase?

A) Share price is $0.10 higher with expansion.
B) Share price is $0.10 higher with repurchase.
C) Share price is the same with both options.
D) Share price is $0.50 higher with expansion.
E) Share price is $0.50 higher with repurchase.