Problem 14.12 – Taco Time Extra Dividend or Share Repurchase
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Difficulty – Medium
Taco Time Corporation is considering either an extra dividend or a share repurchase, Given the shares outstanding, current earnings per share, and stock price, compare the effects on the price per share of the stock and shareholder wealth for the two options, and evaluate the effects on the company's EPS and PE ratio. Determine the EPS and PE Ratio with an extra dividend and with a share repurchase.
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