The market value of a firm under consideration is equal to its book value. Currently, this firm has excess cash of $700 and other assets of $9,100. Equity is worth $9,800. The firm has 700 shares of stock outstanding and net income of $750. What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase?

Multiple Choice

• $.93

• $1.07

• $2.08

• $1.08

• $1.15

The market value of a firm under consideration is equal to its book value. Currently, this firm has excess cash of $700 and other assets of $9,100. Equity is worth $9,800. The firm has 700 shares of stock outstanding and net income of $750. What will the new earnings per share be if the firm uses its excess cash to complete a stock repurchase? Multiple Choice $.93 $1.07 $2.08 $1.08 $1.15