Q39. Cambridge Consolidated plans to borrow $10 million, which it will use to repurchase 100,000 of their 1,100,000 shares currently outstanding. The following additional information is available: Share price at the time of the buyback $40.00 Earnings Per Share (EPS) before the buyback $4.00 Earnings yield (E/P) 10.0% After-tax cost of borrowing 6.0% The EPS after the buyback will be closest to: A. $3.76 B. $4.00 C. $4.16 D. $4.40 |