Allison's Has a Market Value Equal to Its Book Value

Multiple Choice

Allison's has a market value equal to its book value.Currently,the firm has excess cash of $1,100 and other assets of $12,400.Equity is worth $13,500.The firm has 2,500 shares of stock outstanding and net income of $10,800.What will be the new earnings per share if the firm uses its excess cash to complete a stock repurchase?

A) $4.32
B) $4.50
C) $4.82
D) $4.70
E) $4.40