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Effect on the price per share of the stock

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-Flychucker Corporation is evaluating an extra dividend versus a share repurchase. In either case, $9,000 would be spent. Current earnings are $1.30 per share, and the stock currently sells for $64 per share. There are 1,000 shares outstanding. Ignore taxes and other imperfections in answering the first two questions.

-Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth.

-What will be the effect on Flychucker's EPS and PE ratio under the two different scenarios?

Reference no: EM133000139

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