The book value per share of common stock of Lawrence Company is $10. 500 Shares of treasury stock are purchased for $14 per share. How would this transaction affect retained earnings and book value per share?

Book value per share = Total stockholders' equity/Number of common shares outstanding

Select one:

a. No effect on retained earnings and decrease book value per share

b. No effect on retained earnings and increase book value per share

c. Decrease retained earnings and decrease book value per share

d. Cannot be determined from the information provided

e. Decrease retained earnings and increase book value per share