Firms most often choose to institute dividends and buybacks because of the positive effect it has on shareholder value. Using specific examples and calculations (hint: dividend discount model - DDM) illustrate how a share buyback of 5% or a dividend increase of 5% impacts the per share value of a firm. Note: For your DDM calculation assume the growth rate and discount rate stay steady.

Please answer this question by giving an example of calculations of share buyback of 5% or a dividend increase of 5% impacts the per share value of a firm.