Question $2.$ The firm is evaluating an extra dividend versus a share repurchase. In either ca: he whole excessive cash would be spent. Ignore taxes and other imperfections.

Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. $(2$ pts$)$

b$.$ What will be the effect on the company's EPS and P$/$E ratio under the two different scenarios? $(2$ pts$)$