National Tire LTD. reported the following in its financial statements for the quarter ended March 31, 2014.

	December 31, 2013			March 31, 2014
Common shares (no par value; 55,000 shares outstanding)	$	55,000		$	55,000
Contributed surplus		32,500			32,500
Retained earnings		22,500			22,500
Total shareholders' equity	$	110,000		$	110,000

During the quarter ended March 31, 2014, National reported Net Income of $8,250 and declared and paid cash dividends totalling $8,250. Required: 1. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended March 31, 2014. (Round your Earnings per share answer to 2 decimal place.)

Earnings per share
Return on equity		%

2. Assume that National repurchases 10,000 of its common shares at a price of $2.25 per share on April 1, 2014. Also assume that during the quarter ended June 30, 2014, National reported Net Income of $8,250 and declared and paid cash dividends totalling $8,250. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended June 30, 2014

Earnings per share
Return on Equity		%

. (Round "Earnings per share" to 3 decimal places and "Return on equity" to 2 decimal place.)

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? \

By repurchasing shares, a company can ________ both its EPS and ROE