What fraction of the firms shares can the firm repurchase

Reference no: EM131488822

Question: (Stock repurchases and earnings per share) CareMore, Inc. provides in-home medical assistance to the elderly and earned net income of $5 million that it plans to use to repurchase shares of the firm's common stock, which is currently selling for $50 a share. CareMore has 20 million shares of stock outstanding.

a. What fraction of the firm's shares can the firm repurchase for $5 million?

b. If the share repurchase has no impact on the firm's net income, what will be its earnings per share after the repurchase?

Reference no: EM131488822

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