Lester's has a market value balance sheet as shown below. The firm currently has 7,500 shares of stock outstanding at a price per share of $40. Net income is $9,500. The firm has decided to repurchase $20,000 worth of its outstanding stock. What will the firm's PE ratio be after this repurchase, all else held constant?

Question

Lester's has a market value balance sheet as shown below. The firm currently has 7,500 shares of stock outstanding at a price per share of $40. Net income is $9,500.  The firm has decided to repurchase $20,000 worth of its outstanding stock. What will the firm's PE ratio be after this repurchase, all else held constant?

Quizplus · Accepted Answer

The Answer of Lester's has a market value balance sheet as shown below. The firm currently has 7,500 shares of stock outstanding at a price per share of $40. Net income is $9,500.  The firm has decided to repurchase $20,000 worth of its outstanding stock. What will the firm's PE ratio be after this repurchase, all else held constant?

Lester's Has a Market Value Balance Sheet as Shown Below