Example: Black and Smith is expexted to have $88 million in earnings and plans to distribute $44 million to shareholders through dividends or stock repurchases, Currently the stock price is $20, and there are 22 million shares outstanding. A large repurchase could be executed at $22 per share. Calculate the earnings per share difference if the repurchase is implemented.
Answer: EPS0=$88 million/22 million shares=$4.00
Shares repurchased 44 million/$22=2 million shares
EPS1=$88 million /20million shares =$4.40
New shar price= EPS1*P/E=$4.40*5= $22
问题： 为什么EPS1还是用 $88 million 算， 而不是用 $88-$44=$44 来算。
P/E ratio 为什么不变？
望达人解答 谢谢了。 | 
发表于 2005-11-5 18:26
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