General Accounting Flychucker Corporation is evaluating an extra dividend versus a sharerepurchase. In either case $13,000 would be spent. Current earnings are $1.30per share, and the stock currently sells for $52 per share. There are 2,000shares outstanding. Ignore taxes and other imperfections.a. Evaluate the two alternatives in terms of the effect on the price per share ofthe stock and shareholder wealth per share. (Do not round intermediatecalculations and round your final answers to 2 decimal places. (e.g., 32.16))b. What will be the effect on Flychucker's EPS and PE ratio under the twodifferent scenarios? (Do not round intermediate calculations and round yourfinal answers to 2 decimal places. (e.g., 32.16))

Step 1: Define Price to earnings ratioPrice to earnings ratio or P/E Ratio is a ratio that gives an…

Answered: Flychucker Corporation is evaluating an…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Erna Corporation is evaluating an extra dividend versus a share repurchase. In either case, $53,500 would be spent. Current earnings are $1.79 per share, and the stock currently sells for $64 per share. There are 9,000 shares outstanding. Ignore taxes and other imperfections. a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What will the company's EPS and PE ratio be under the two different scenarios? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Extra dividend Price per share Shareholder wealth a. Repurchase Price per share Shareholder wealth b. Extra dividend EPS PE ratio b. Repurchase EPS PE ratio
Vijay
Can you please answer the question?
ed Erna Corporation is evaluating an extra dividend versus a share repurchase. In either case, $53,500 would be spent. Current earnings are $1.79 per share, and the stock currently sells for $64 per share. There are 9,000 shares outstanding. Ignore taxes and other imperfections. a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What will the company's EPS and PE ratio be under the two different scenarios? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
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please help i cant fogure what im doing wrong for the last question
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