Please tell me all details, informations, and explanations.

I need answer for Problem 9

Problem 8

Cash Dividends

The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $1 per share, and there are 20,000 shares of stock outstanding. The market value balance sheet for Payout is shown below:

Assets	Liabilities and Equity
Cash $100,000	Equity $1,000,000
Fixed assets $900,000	Debt $0

a. What price is Payout stock selling for today?

b. What price will it sell for tomorrow? Ignore taxes

Problem 9 Repurchases

Now suppose that Payout from problem 8 announces its intentions to repurchase $20,000 worth of stock instead of paying out the dividend.

a. What effect will the repurchase have on an investor who currently holds 100 shares and sells 2 of those shares back to the company in the repurchase?

b. Compare the effects of the repurchase to the effects of the cash dividend that you worked out in problem 8.