(Stock repurchases and earnings per share) CareMore, Inc. provides in-home medical assistance to the elderly and earned net income of $5.4 million that it plans to use to repurchase shares of the firm's common stock, which is currently selling for $41 a share. CareMore has 20 million shares of stock outstanding. a. What fraction of the firm's shares can the firm repurchase for $5.4 million? (round to two decimal places) b. If the share repurchase has no impact on the firm's net income, what will be its earnings per share after the repurchase? (round to four decimal places)

(Stock repurchases and earnings per share) CareMore, Inc. provides in-home medical assistance to the elderly and earned net income of $5.4 million that it plans to use to repurchase shares of the firm's common stock, which is currently selling for $41 a share. CareMore has 20 million shares of stock outstanding. a. What fraction of the firm's shares can the firm repurchase for $5.4 million? (round to two decimal places) b. If the share repurchase has no impact on the firm's net income, what will be its earnings per share after the repurchase? (round to four decimal places)

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter18: Initial Public Offerings, Investment Banking, And Capital Formation

Section: Chapter Questions

Problem 9MC

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