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Erna Corporation is evaluating an extra dividend versus a share repurchase. In either case, $ 1 7 , 0 0 0 would be spent. Current

Erna Corporation is evaluating an extra dividend versus a share repurchase. In either case, $17,000 would be spent. Current earnings are $1.60 per share, and the stock currently sells for $40 per share. There are 2,500 shares outstanding. Ignore taxes and other imperfections. a. Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g.,32.16.)
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