Acsenda State Mining recently sold a parcel of land for $15 million for cash. Neil, the generous CEO wishes to return all this money to the shareholders, who are also the current students of Ascenda School of Management in Vancouver, and is debating either a special dividend or buyback ASM's outstanding shares from these shareholders. ASM has a net income of $5 million and 5,000,000 shares outstanding and it's stock trades at a PE multiple of 12.

a) What effect on shareholder wealth if either the special dividend or repurchases takes place?

b) Show, if any, effect on each alternatives to ASM's capital structure. Note, show calculations for a maximum of 6 marks and your explanation for another 12 marks