Hewlard Pockets market value balance sheets illustrate the effects of dividends versus repurchases.

Assets Liabilities and Shareholders Equity A. Original balance sheet Cash $ 150,000 Debt $ 0 Other assets 950,000 Equity 1,100,000 Value of firm $ 1,100,000 Value of firm $ 1,100,000 Shares outstanding = 100,000 Price per share = $1,100,000 / 100,000 = $11

Pocket wins a lawsuit and is paid $130,000 in cash. The market value of the equity rises by that amount, and Pocket decides to pay out $2.30 per share.

a.

What will be Pockets stock price if the payout comes as a cash dividend? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock price $ per share

b. What will be Pockets stock price if the payout comes as a share repurchase? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Stock price $ per share