Big Industries has the following market-value balance sheet. The stock currently sells for $20 a share, and there are 1,280 shares outstanding. The firm will either pay a $1 per share dividend or repurchase $1,280 worth of stock. Ignore taxes.

Assets				Liabilities and Equity
Cash	$	7,600		Debt	$	11,400
Fixed assets		29,400		Equity		25,600

a. What will be the subsequent price per share if the firm pays a dividend?

b. What will be the subsequent price per share if the firm repurchases stock? (Round your answer to the nearest dollar.)

c. If total earnings of the firm are $28,800 a year, find earnings per share if the firm pays a dividend. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

d. If total earnings of the firm are $28,800 a year, now find earnings per share if the firm repurchases stock. (Do not round intermediate calculations. Round your answer to 3 decimal places.)

e. If total earnings of the firm are $28,800 a year, find the price-earnings ratio if the firm pays a dividend. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

f. If total earnings of the firm are $28,800 a year, find the price-earnings ratio if the firm repurchases stock. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

g. Adherents of the dividends-are-good school sometimes point to the fact that stocks with high dividend payout ratios tend to sell at above-average price-earnings multiples. Is Big Industries P/E ratio higher if it pays a dividend?