Mike Trout is an analyst in the research department of an international securities firm. Mike is currently analyzing Hildy Products, a publicly traded global consumer goods company located in the United States. Selected data for Hildy are presented in Exhibit 1

EXHIBIT 1 SELECTED FINANCIAL DATA FOR HILDY PRODUCTS

Most Recent Fiscal Year:

Pretax income- $280 million

Net Income after tax -$182 million

Cash flow from operations- $235 million

Capital expenditures- $175 million

Earnings per share- $1.82

Current:

Shares outstanding- 100 million

Book value per share- $25.60

Share price- $20.00

Hildy currently does not pay a dividend, and the company operates with a target capital structure of 40% debt and 60% equity. However, on a recent conference call, Hildy's management indicated that they are considering four payout proposals:

Proposal #2: Repurchase $40 million in shares using idle cash

If Hildy/s management implemented Proposal #2 at the current share price shown in Exhibit 1, Hildy's book value per share after implementation would be closest to:

A. $25.20

B.$25.71

C.$26.12

*show work please