Campbell Corporation is evaluating an extra dividend versus a share repurchase. In either case, $15,000 would be spent. Current earnings are $1.60 per share, and the stock currently sells for $48 per share. There are 2,500 shares outstanding. Ignore taxes and other imperfections.

**a.** Evaluate the two alternatives in terms of the effect on the price per share of the stock and shareholder wealth per share. **(Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)**

Alternative I Extra dividend

Price per share $_______

Shareholder wealth $_______

Alternative II Repurchase

Price per share $ _______

Shareholder wealth $________

**b.** What will the company's EPS and PE ratio be under the two different scenarios? **(Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)**

Alternative 1

EPS $________

PE ratio ________

Alternative II

EPS $_______

PE ratio _______

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