ZephyrTech Inc. has the following financial data: . . Current market price per share: $40 Number of outstanding shares: 800,000 The company plans to repurchase 80,000 shares Current Earnings per Share (EPS): $4 Current Price-to-Earnings (P/E) ratio: 10 What will be the new EPS after the share repurchase, assuming total earnings remain constant?

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
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Financial Accounting Question

ZephyrTech Inc. has the following financial data:
.
.
Current market price per share: $40
Number of outstanding shares: 800,000
The company plans to repurchase 80,000 shares
Current Earnings per Share (EPS): $4
Current Price-to-Earnings (P/E) ratio: 10
What will be the new EPS after the share repurchase, assuming total earnings remain constant?
Transcribed Image Text:ZephyrTech Inc. has the following financial data: . . Current market price per share: $40 Number of outstanding shares: 800,000 The company plans to repurchase 80,000 shares Current Earnings per Share (EPS): $4 Current Price-to-Earnings (P/E) ratio: 10 What will be the new EPS after the share repurchase, assuming total earnings remain constant?
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