Assume that Vote, Vote, Vote Your Voice, Inc. is fairly valued at $57.15. Independent of prior spend decision, the Company is considering a recapitalization in which it would use $1.0 million of excess cash, currently earning 2.0% interest, and issue another $1.6 million of debt at 5.8%, to buy back stock or issue a dividend. The debt would stay on the books in perpetuity.

1. If it were to buy back stock, how many shares would it be able to buy back and at what stock price?
2. If it were to issue a dividend, what would be the amount of dividend per share, the stock price, and the resulting dividend yield in 2020?
3. What is one consideration the Company must take into account when choosing a payout policy (ie share repurchase vs dividend)?