Stock Repurchase

Flychucker Corporation is evaluating an extra dividend versus a share repurchase. In either case $$3,600$

would be spent. Current earnings are $$2\mathrm{.}50$ per share, and the stock currently sells for $$75$ per share.

There are $600$ shares outstanding. Ignore taxes and other imperfections.

What will be the effect on Flychucker's EPS and PE ratio under the two different scenarios?