5. Assume that a firm has shareholders equity on the balance sheet at a book value of $1,600 at the end of 2010. During 2011 the firm earned net income of $1,300, pays dividends to shareholders of $600, and uses $300 to repurchase common shares. The book value of shareholders equity at the end of 2011 is:

a. $7,000

b. $400

c. $3,800

d. $2,600