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A firm's common stock is trading at a P/E of 20. Its projected earnings per share are $2.00 and its share price is $40. All
A firm's common stock is trading at a P/E of 20. Its projected earnings per share are $2.00 and its share price is $40. All shareholders are tax exempt. An open market purchase would result in projected earning per share of $2.70. How would you expect the announcement of the share repurchase program to affect the firms share price?
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