The following information is available for a firm:
| Number of shares outstanding | 4 million |
| Tax rate | 40% |
| Cost of debt (pre-tax) | 10% |
| Current stock price | $20.00 |
| Net income | $6 million |
A plan to repurchase $10 million worth of shares using debt will most likely cause the earnings per share to:
"Dividends and Share Repurchases: Basics," George Troughton and Gregory Noronha Section 4.2.1
"Cost of Capital," Yves Courtois, Gene c. Lai, and Pamela Peterson Drake Section 2.1