Hodgkiss Corporation is evaluating an extra dividend versus a share repurchase. In either case, $27,000 would...

60.1K

Verified Solution

Question

Finance

Hodgkiss Corporation is evaluating an extra dividend versus ashare repurchase. In either case, $27,000 would be spent. Currentearnings are $2.70 per share, and the stock currently sells for $96per share. There are 4,500 shares outstanding. Ignore taxes andother imperfections.

What will the company’s EPS and PE ratio be under the two differentscenarios? (Do not round intermediate calculations andround your answers to 2 decimal places, e.g.,32.16.)
Extra Dividend Share Repurchase
EPS $ $
PE Ratio

Answer & Explanation Solved by verified expert

3.9 Ratings (425 Votes)

NO OF SHARES ARE See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Hodgkiss Corporation is evaluating an extra dividend versus ashare repurchase. In either case, $27,000 would be spent. Currentearnings are $2.70 per share, and the stock currently sells for $96per share. There are 4,500 shares outstanding. Ignore taxes andother imperfections.What will the company’s EPS and PE ratio be under the two differentscenarios? (Do not round intermediate calculations andround your answers to 2 decimal places, e.g.,32.16.)Extra DividendShare RepurchaseEPS$$PE Ratio