How will the ratios be affected relative to repurchasing

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Reference no: EM133265526

Question: Share Repurchases Xtra Cash has always repurchased common shares and held them in treasury stock to re-issue later, but is now considering using the same amount of cash to repurchase common shares and retire the shares instead. The stock currently trades at $50 per share, and the shares were originally issued to shareholders for $4. Assume the market is (shareholders are) indifferent between the two options. If Xtra Cash decides to repurchase and retire, how will the following ratios be affected (relative to repurchasing and holding in treasury stock):

a. Basic Earnings Per Share (EPS)

Circle one: INCREASE DECREASE NO EFFECT Not enough Information

b. Altman Z-Score Circle one: INCREASE DECREASE NO EFFECT Not enough Information

Reference no: EM133265526

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