An Edmonton firm has a market value equal to its book value. Currently, the firm has excess cash of $1,040 and other assets of $6,950. Equity is worth $4,800. The firm has 240 shares of stock
Outstanding and net income of $410. What will the new earnings per share be if the firm uses its
Excess cash to complete a stock repurchase?
A) $2.08
B) $2.13
C) $2.18
D) $2.21
E) $2.42
Correct Answer:
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