The stock of Payout Corp. will go ex-dividend tomorrow. The dividend will be $1 per share, and there are 25,000 shares of stock outstanding. The market-value balance sheet for Payout is shown below.

Assets			Liabilities and Equity
Cash	$	300,000	Equity	$	1,250,000
Fixed assets		950,000

So far, price of the share today is $50 per share and it will sell at $49 per share for tomorrow. Now suppose that Payout announces its intention to repurchase $25,000 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?

Total value of the position

$

b. What effect will the initial cash dividend payment have on the same investor?