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For Team Andrews calculate both Market Capitalization and Earnings per Share (EPS) in the last round. Show calculations. In the next round, what would EPS be for Team Andrews be if Profits increased by 10% relative to this year and Andrews bought back 679,391 shares

User PStan
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Answer:

$14.32

Step-by-step explanation:

Note: See below for attached picture for the question

Market Capitalization = Total outstanding shares * Last closing price of share

Market Capitalization = 2,679,391*$86.73

Market Capitalization = $232,383,581.43

Earning Per share = Profit after tax and Dividend / Total outstanding shares

Earning Per share = $26,054,226 / 2,679,391

Earning Per share = $9.72

The EPS when profits are increased by 10% ans shares are bought back is calculated as follows:

New profits = $26,054,226 + (10%*$26,054,226)

New profits = $26,054,226 + $2,605,422.60

New profits = $28,659,648.60

Total outstanding shares = 2,679,391 - 679,391

Total outstanding shares = 2,000,000

EPS = New profits / Total outstanding shares

EPS = $28,659,648.60/2,000,000

EPS = $14.32

For Team Andrews calculate both Market Capitalization and Earnings per Share (EPS-example-1
User Menelik
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