ABC Corporation has the following financial information: • Current market price per share: $50 • Number of outstanding shares: 1,000,000 • Company plans to repurchase 100,000 shares • Current Price-to-Earnings (P/E) ratio: 10 ⚫ Current Earnings per Share (EPS): $5 What will be the new EPS after the share repurchase, assuming total earnings remain constant? a) $5.56 b) $5.25 c) $4.75 d) $5.00
ABC Corporation has the following financial information: • Current market price per share: $50 • Number of outstanding shares: 1,000,000 • Company plans to repurchase 100,000 shares • Current Price-to-Earnings (P/E) ratio: 10 ⚫ Current Earnings per Share (EPS): $5 What will be the new EPS after the share repurchase, assuming total earnings remain constant? a) $5.56 b) $5.25 c) $4.75 d) $5.00
Chapter14: Distributions To Shareholders: Dividends And Repurchases
Section: Chapter Questions
Problem 2STP
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