The Fourth Corp. is evaluating extra cash dividends versus share repurchases. In either case, $6,675 will be spent. Current earnings are $2.8 per share and the stock currently sells for $67 per share. There are 1,500 shares outstanding. Ignore taxes and any information asymmetry in the financial market. Which of the following is correct?

Group of answer choices

Shareholder wealth will be higher if the firm repurchases shares because repurchases can boost share price.

Shareholder wealth will be lower if the firm pays extra cash dividends because share price is lower.

Shareholder wealth will be lower if the firm repurchases shares because shares outstanding is reduced as a result of the repurchase.

Shareholder wealth is the same regardless of which payout policy is chosen.