(Answered) Question repurchase versus cash dividend trantor

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Question: Repurchase versus Cash Dividend. Trantor Corporation is deciding whether to pay out $300 in excess cash in the form of an extra dividend or a share repurchase. Current earnings are $1.50 per share, and the stock sells for $15. The market value balance sheet before paying out the $300 is as follows.

Evaluate the two alternatives in terms of the effect on the price per share of the stock, the EPS, and the PE ratio.

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