1.a. Xtra Corp. has assets with a market value of $500 million, $60 million of which are cash. It has debt of $200 million, and 15 million shares outstanding. Assume perfect capital markets. Suppose that the company plans to distribute the $60 million to its shareholders either as a dividend or as a share repurchase. If Xtra distributes $60 million as a dividend, what will its share price be on the ex-dividend date? If instead, Xtra distributes $60 million as a share repurchase, what will its share price be once the shares are repurchased?

	$7.00 on the ex-dividend date; $10.00 after the repurchase
	$14.00 on the ex-dividend date; $17.50 after the repurchase
	$16.00 on the ex-dividend date; $20.00 after the repurchase
	$26.50 on the ex-dividend date; $12.50 after the repurchase
	None of the above

1.b. The date on which the stock price goes down because of a dividend is called:

	declaration date
	distribution date
	record date
	ex-dividend date
	none of the above