1. The following information relates to two companies that each plan to repurchase $2 million worth of common stock. The only difference between the companies is that Company A has a higher book value of equity and a higher book value per share. Evaluate the impact of the repurchase on the companies' book values per share. Stock price Number of shares outstanding Buyback amount Book value of equity Company A $50 10 million $2 million $600 million Company B $50 10 million $2 million $200 million 2. Ray X corp. is deciding between distributing $20 million of excess cash to its shareholders through a share repurchase or a special dividend. The company has 10 million shares outstanding and the current market price of its stock is $40. Determine the effects on shareholder wealth under both the distribution methods being considered by the company