The following financial data on the MM Entertainment Company are available:

The firm is currently considering whether it should use $$4,000,000$ of its earnings to pay cash

dividends of $$1$ per share or to repurchase stock at $$21$ per share.

a$.$ Approximately how many shares of stock can the firm repurchase at the $$21-$pershare

price, using the funds that would have gone to pay the cash dividend?

b$.$ Calculate the EPS after the repurchase. Explain your calculations.

c$.$ If the stock still sells at $10$ times earnings, what will the market price be after the

repurchase?

d$.$ Compare the pre$-$ and post$-$repurchase earnings per share.

e$.$ Compare and contrast the stockPholders' positions under the dividend and repurchase

alternatives.