Answer:
The price–earnings ratio after the repurchase is 22.18
Explanation:
First calculate Numbers of new shares
New Shares = Old Shares - ( Repurchased Shares / Price per share )
New Shares = 39,000 - ( $125,000 / $76.09 )
New Shares = 39,000 - 1,642.79
New Shares = 37,357.21 shares
New compute the old earning
Old Earning = EPS x Numbers of old shares = $3.29 x 39,000 = $128,310
New compute revised Earning per share
Revised EPS = Earning / New shares = $128,310 / 37,357.21 shares = $3.43
Now we need to calculate the Price earning ratio
P/E Ratio = Price per share / Revised earning per share = $76.09 / $3.43 = 22.18 times
