Erna Corporation is evaluating an extra dividend versus a share repurchase. In either case, $15,000 would be spent. Curr

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answerhappygod
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Erna Corporation is evaluating an extra dividend versus a share repurchase. In either case, $15,000 would be spent. Curr

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Erna Corporation is evaluating an extra dividend versus a sharerepurchase. In either case, $15,000 would be spent. Currentearnings are $2.50 per share, and the stock currently sells for $50per share. There are 4,000 shares outstanding. Ignore taxes andother imperfections.
Evaluate the two alternatives in terms of the effect on theprice per share of the stock and shareholder wealth pershare. (Do not round intermediate calculations andround your answers to 2 decimal places, e.g., 32.16.)
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