J. Bartley Pools Inc. reported the following in its financial statements for the quarter ended
March 31, 2014.

During the quarter ended March 31, 2014, Bartley reported Net Income of $5,000 and declared and paid cash dividends totalling $5,000.
Required:
1. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended March 31, 2014.
2. Assume that Bartley repurchases 10,000 of its common shares at a price of $2 per share on April 1, 2014. Also assume that during the quarter ended June 30, 2014, Bartley reported Net Income of $5,000 and declared and paid cash dividends totalling $5,000. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended June 30, 2014.
3. Based on your calculations in requirements 1 and 2, what can you conclude about the impact of a share repurchase on EPS and ROE?

December 31, 2013 March 31, 2014 S 50,000 30,000 $ 50,000 30,000 20,000 Common shares (no par value, 50,000 shares autstanding) Contributed surplus Retained earnings Total shareholders' equity 20,000 S100,000 $100,000