Final answer:
The new book value of equity for JM Case Inc. after a share repurchase cannot be determined without knowing the number of shares repurchased or the amount of money used for the repurchase. Therefore, the correct answer is 'Cannot be determined'.
Step-by-step explanation:
The student has asked about the impact of a share repurchase on the book value of equity for JM Case Inc. Firstly, let's clarify the difference between market value and book value. The book value is the value of the company according to its balance sheet, which represents historical costs minus liabilities. The market value is the current value of the company reflected by the price of its shares multiplied by the number of shares outstanding.
In this scenario, JM Case Inc. has a book value of equity of $1,750,000 and a market value of $5,000,000. If the company repurchases shares at their book value, it would use its cash or assets to buy back shares, reducing the number of shares outstanding but also reducing the company's equity by the amount spent on the repurchase. Because the question does not specify how many shares would be repurchased or the amount of money used for the repurchase, we cannot determine the new book value of equity without that additional information. Therefore, the correct answer is (4) Cannot be determined.