See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco repurchases 1.6 million shares each year from 2013 to 2016. What would be its earnings per share in 2016? (Assume Mydeco pays for the shares using its available cash and that Mydeco earns no interest on its cash balances.) (Select the best choice below.) O A. A repurchase does not impact earnings directly, so any change to EPS will come from an increase in shares outstanding. 2016 shares outstanding = 56 million + 4x1.6 million = 54.4 million, EPS = $14.5 million/54.4 million = $0.27. OB. A repurchase does not impact earnings directly, so any change to EPS will come from a reduction in shares outstanding. 2016 shares outstanding = 56 million - 4x 1.6 million = 49.6 million, EPS = $18.1 million/49.6 million = $0.36. O C. A repurchase does not impact earnings directly, so any change to EPS will come from an increase in shares outstanding. 2016 shares outstanding = 56 million + 4 x 1.6 million = 54.4 million, EPS = $18.1 million / 54.4 million = $0.33. OD. A repurchase does not impact earnings directly, so any change to EPS will come from a reduction in shares outstanding. 2016 shares outstanding = 56 million -4X 1.6 million = 49.6 million, EPS = $14.5 million / 49.6 million = $0.29. 2014 | 1 2012 2013 2014 2015 2016 401.6 368.3 421.9 12191507. 6 507.6 602.4 (184.2) (175.5) (205.0) (248.4) (291.5) 217.4. 192.8 216.9 259.2 310.9 (68.4) (65.8) (84.2) (96.9) (122.1) (59.0) (57.6) (59.1) (64.6) (80.1) (28.1) (26.8) (32.9) (37.0) (39.8) 61.9 42.6 40. 7 60. 7 68.9 (31.9) (32.5) (32.5) (38.4) (41.1) 30 10.1 8. 2 22. 3 27.8 (10.5) (3.5) (2.9) (7.8) (9.7) 19.5 6.6 5.3 14.5 18.1 56 561 561 561 56 $0.35 $0.12 $0.09 $0.26 $0.32 2012 2013 2014 2015 2016 F 49.3 90.4 33.6 173.3 240.4 365.8 779.5 79.4 68.5 30.6 178.5 240.3 365.8 784.6 88.1 71.1 27.9 187.1 305.4 365.8 858.3 77.8 78.6 32.8 189.2 340.9 365.8 895.9 82.2 84.1 37.1 203.4 350.2 365.8 919.4 Income Statement Revenue Cost of Goods Sold Gross Profit Sales and Marketing Administration Depreciation & Amortization EBIT Interest Income (Expense) Pretax Income Income Tax Net Income Shares outstanding (millions) Earnings per share Balance Sheet Assets Cash Accounts Receivable Inventory Total Current Assets Net Property, Plant & Equip. Goodwill & Intangibles Total Assets Liabilities & Stockholders' Equity Accounts Payable Accrued Compensation Total Current Liabilities Long-term Debt Total Liabilities Stockholders' Equity Total Liabilities & Stockholders' Equity Statement of Cash Flows Net Income Depreciation & Amortization Chg. in Accounts Receivable Chg. in Inventory Chg. in Pay. & Accrued Comp. Cash from Operations Capital Expenditures Cash from Investing Activ. Dividends Paid Sale (or purchase) of stock Debt Issuance (Pay Down) Cash from Financing Activ. Change in Cash Mydeco Stock Price 19.9 6.1) 9.5 6.6 26 500.8 526.8 252.7 779.5 2012 19.5 28.1 3.9 (2.9) 2.9 51.5 (25.6) (25.6) (5.3) - - (5.3) 20.6 $7.21 19.5 23.6 27.2 30.3 6.7 6.5 7.6 26.2 30.1 34.8 39.8 500.8 575 600.9 600.9 527 605.1 635.7 640.7 257.6 253.2 260.2 278.7 784.6 858.3 895.9 919.4 2013 2014) 2015 2016 5.3 14.5 18.1 26.8 32.9 | 37 39.8 21.9 -2.6 (7.5) (5.5) 3 2.7 114.9) (4.3) 0.2 - 4.7 5 58.5 42. 2 43. 8 53.1 (23.1) (102.4) (74.7) (41.8) (23.1) (102.4) ((74.7) (41.8) (5.3) (5.3) (5.3) (6.9) - - - 74.2 25.9 - (5.3) 68.9 20.6 (6.9) 30.1 8.7 (10.3) 4.4 $4.21 $4.26 $8.65 $11.94 3.9
