The Off$-$Shore Steel Company has earnings available for common stockholders of $$2$ million and has $500,000$ shares of common stock outstanding at $$60$ per share. The firm is currently contemplating the payment of $$2$ per share in cash dividends.

$1.$ Calculate the firm$$s current earnings per share and price$/$earnings ratio.

$2.$ If the firm can repurchase stock at $$60$ per share in the open market, how many shares can it buy back in lieu of paying a dividend?

$3.$ How much will the EPS be after the proposed repurchase? Why?

$4.$ Assuming a perfect market, what is the market price of the stock after repurchase? What is the P$/$E ratio?

$5.$ Compare the earnings per share before and after the proposed repurchase.

Please provide with the following information:

$-$ Identify and record the unknown which the question is asking you to solve

$-$ Identify and record the relevant equation$($s$)$ that is $($are$)$ necessary to help you solve the problem, using only letters and symbols.

$-$ Re$-$arrange the equation$($s$)$ if necessary to solve the problem

$-$ Substitute the numbers into the equation$($s$)$ and solve the problem using the problem using the equation