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(Stock repurchases and earnings per share) CareMore, Inc. provides in-home medical assistance to the elderly and earned net income of $ 5.4 million that it
(Stock repurchases and earnings per share) CareMore, Inc. provides in-home medical assistance to the elderly and earned net income of $ 5.4 million that it plans to use to repurchase shares of the firm's common stock, which is currently selling for $ 45 a share. CareMore has 25 million shares of stock outstanding. a. What fraction of the firm's shares can the firm repurchase for $ 5.4 million? b. If the share repurchase has no impact on the firm's net income, what will be its earnings per share after the repurchase?
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