Question: Question 1 Pacific King is evaluating an extra dividend versus a share repurchase. In either case $5,000 would be spent. Current earnings are $2.10 per

Question 1 Pacific King is evaluating an extra dividend versus a

Question 1 Pacific King is evaluating an extra dividend versus a share repurchase. In either case $5,000 would be spent. Current earnings are $2.10 per share, and the stock currently sells for $50 per share. There are 1,000 shares outstanding. Ignore taxes and other imperfections in answering parts (a) and (b). Evaluate the two alternatives in terms of the effect on the price per share of the stock and sharcholdet wealth. b. What will be the cffect on Pacific King's EPS and PE ratio under the two different scenarios? In the real world, which of these actions would you recommend? Why? a. c

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