Question: Flychucker Corporation is evaluating an extra dividend versus a share repurchase. In either case $ 5 , 5 0 0 would be spent. Current earnings

Flychucker Corporation is evaluating an extra dividend versus a share repurchase. In either case
$5,500 would be spent. Current earnings are $.95 per share, and the stock currently sells for $30
per share. There are 230 shares outstanding. Ignore taxes and other imperfections.
a. What will be the effect on Flychucker's EPS and PE ratio under the two different scenarios?
7 points
b. In the real world, which of these actions would you recommend? Why? 3 points
Flychucker Corporation is evaluating an extra dividend versus a share repurchase.

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