E) Save & Exit || Submit Question 3 (of 10) value: 10.00 points Hodgkiss Corpora

Question

E) Save & Exit || Submit Question 3 (of 10) value: 10.00 points Hodgkiss Corporation is evaluating an extra dividend versus a share repurchase. In either case, $34,320 would be spent. Current earnings a $3 40 per share, and the stock currently sells for $79 per share. There are 5,200 shares outstanding. Ignore taxes and other imperfections. What will the company's EPS and PE ratio be under the two different scenarios? (Do not r answers to 2 decimal places, e.g., 32.16.) under the two different scenarios? (Do not rodnd intermediate calculations and round your Extra DividendShare Repurchase EPS PE Ratio References eBook & Resources Worksheet Learning Objective: 14-04 Explain why share repurchases are an émative to dividends Difficulty: 2 intermediate 14.5 Stock Dividends and Stock Splits

Explanation / Answer

Extra dividend will not affect the EPS.

Share repurchase:

Extra dividend: EPS 3.4 PE Market price/EPS 79/3.4 23.240

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