J. Bartley Pools Inc. reported the following in its financial statements for the quarter ended March 31, 2017.

During the quarter ended March 31, 2017, Bartley reported Net Income of $5,000 and declared and paid cash dividends totalling $5,000.

Required:

1. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended March 31, 2017.

2. Assume that Bartley repurchases 10,000 of its common shares at a price of $2 per share on April 1, 2017. Also assume that during the quarter ended June 30, 2017, Bartley reported Net Income of $5,000, and declared and paid cash dividends totalling $5,000. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended June 30, 2017.

3. Based on your calculations in requirements 1 and 2, what can you conclude about the impact of a share repurchase on EPS and ROE?

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December 31, 2016 March 31, 2017 Common shares (no par value; 50,000 shares outstanding) Contributed surplus Retained earnings Total shareholders' equity $ 50,000 $ 50,000 30,000 30,000 20,000 20,000 $ 100,000 $100,000