Swimtech Pools Inc. (SPI) reported the following in its financial statements for the quarter ended March 31, 2010.

During the quarter ended March 31, 2010, SPI reported Net Income of \$5,000 and declared and paid cash dividends totaling \(\$ 5,000\).

Required:
1. Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended March 31, 2010.
2. Assume SPI repurchases 10,000 of its common stock at a price of \(\$ 2\) per share on April 1, 2010. Also assume that during the quarter ended June 30, 2010, SPI reported Net Income of \(\$ 5,000\), and declared and paid cash dividends totaling \(\$ 5,000\). Calculate earnings per share (EPS) and return on equity (ROE) for the quarter ended June 30, 2010.
3. Based on your calculations in requirements 1 and 2 , what can you conclude about the impact of a stock repurchase on EPS and ROE?

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December 31, 2009 March 31, 2010 $ 50,000 Common Stock, $1 par, 50,000 shares outstanding Additional Paid-In Capital Retained Earnings Total Stockholders' Equity $ 50,000 30,000 20,000 $100,000 30,000 20,000 $100,000