Answer:
The company's expected market price per share After the repurchase would $23.68
Explanation:
In order to calculate the company's expected market price per share After the repurchase we would have to calculate first the Price-to-earnings ratio ( P/E ratio ) as follows:
Price-to-earnings ratio ( P/E ratio )= Market price per share / Earnings per share
Earnings per share = Earnings/ number of shares outstanding =$ 5,700,000 / $790,000 = $ 7.21
Therefore, Price -to-earnings ratio = $ 21 / $ 7.21 = 2.91
If 90,000 shares are repurchased, Therefore Earnings per share =$ 5,700,000 / $700,000 = $ 8.14
Therefore, the company's expected market price per share After the repurchase=$ 8.14 x 2.91 = $23.68
