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Green Thumb Nursery has 32,000 shares outstanding at a market price of $62.15 per share. The earnings per share are $3.15. The firm has total assets of $315,000 and total liabilities of $186,000. Today, the firm announced a share repurchase for $75,000 of its stock. What is the earnings per share after the repurchase?

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Tundexi

Answer:

$3.27

Explanation:

Earnings = Earnings per share * Number of stock outstanding

Earnings = $3.15 * 32,000 shares

Earnings = $100,800

Number of shares repurchased = $75,000 / $62.15

Number of shares repurchased = 1206.75784393

Number of shares repurchased = 1,207

Number of stock outstanding = 32,000 - 1,207

Number of stock outstanding = 30,793

Earnings per share after the stock repurchase = Earnings / Number of stock outstanding

Earnings per share after the stock repurchase = $100,800 / 30,793

Earnings per share after the stock repurchase = $3.2734712435

Earnings per share after the stock repurchase = $3.27

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