See Table 2.5 B showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco repurchases 2.4 million shares each year from 2016 to 2019. What would be its earnings per share in 2019? (Assume Mydeco pays for the shares using its available cash and that Mydeco earns no interest on its cash balances.) (Select the best choice below.) O A. A repurchase does not impact earnings directly, so any change to EPS will come from a reduction in shares outstanding. 2019 shares outstanding = 55 million - 4x2.4 million = 45.4 million, EPS = $15.1 million/45.4 million = $0.33. = = 55 million - 4x 2.4 million = 45.4 million, B. A repurchase does not impact earnings directly, so any change to EPS will come from a reduction in shares outstanding. 2019 shares outstanding EPS = $25.3 million / 45.4 million = $0.56. O C. A repurchase does not impact earnings directly, so any change to EPS will come from an increase in shares outstanding. 2019 shares outstanding = 55 million +4x2.4 million = 52.6 million, EPS = $25.3 million/52.6 million = $0.48. D. A repurchase does not impact earnings directly, so any change to EPS will come from an increase in shares outstanding. 2019 shares outstanding = 55 million + 4x 2.4 million = 52.6 million, EPS = $15.1 million / 52.6 million = $0.29. = 2015-2019 Financial Statement Data and Stock Price Data for Mydeco Corp. (All data as of fiscal year end; in $ millions) Income Statement 2015 2016 2017 2018 Revenue 408.3 367.5 421.2 506.3 Cost of Goods Sold (184.1) (176.1) (208.0) (243.2) Gross Profit 224.2 191.4 213.2 263.1 Sales and Marketing (66.9) (66.3) (84.5) (103.8) Administration (60.9) (57.8) (58.5) (66.3) Depreciation & Amortization (25.5) (28.6) (35.0) (37.4) EBIT 70.9 38.7 35.2 55.6 Interest Income (Expense) (34.0) (31.0) (32.0) (35.5) Pretax Income 36.9 7.7 3.2 20.1 Income Tax (9.2) (1.9) (0.8) (5.0) Net Income 27.7 5.8 2.4 15.1 Shares Outstanding (millions) 55 55 55 55 Earnings per Share $0.50 $0.11 $0.04 $0.27 Balance Sheet 2015 2016 2017 2018 Assets Cash 48.6 76.2 89.1 82.6 Accounts Receivable 88.6 71.3 70.2 75.3 Inventory 32.9 30.6 27.5 31.9 Total Current Assets 170.1 178.1 186.8 189.8 Net Property, Plant & Equipment 240.3 245.9 304.5 344.7 Goodwill & Intangibles 357.9 357.9 357.9 357.9 Total Assets 768.3 781.9 849.2 892.4 Liabilities & Stockholders' Equity Accounts Payable 17.1 19.7 21.5 26.5 Accrued Compensation 6.8 6.2 6.8 8.5 2019 605.6 (293.6) 312.0 (122.4) (76.9) (38.9) 73.8 (40.1) 33.7 (8.4) 25.3 55 $0.46 2019 90.4 87.7 37.2 215.3 351.7 357.9 924.9 32.2 10.3 501.4 501.4 574.5 525.3 243.0 527.3 254.6 781.9 602.8 246.4 598.0 633.0 259.4 598.0 640.5 284.4 768.3 849.2 892.4 924.9 2017 2019 Long-Term Debt Total Liabilities Stockholders' Equity Total Liabilities & Stockholders' Equity Statement of Cash Flows Net Income Depreciation & Amortization Change in Accounts Receivable Change in Inventory Change in Pay. & Accrued Comp. Cash from Operations Capital Expenditures Cash from Investing Activ. Dividends Paid Sale (or Purchase) of Stock Debt Issuance (Pay Down) Cash from Financing Activ. Change in Cash Mydeco Stock Price 2015 27.7 25.5 3.9 (2.9) 1.6 2016 5.8 28.6 17.3 2.3 2.0 2.4 35.0 1.1 3.1 2.4 2018 15.1 37.4 (5.1) (4.4) 6.7 49.7 (75.1) (75.1) (4.6) 25.3 38.9 (12.4) (5.3) 7.5 54.0 (39.3) (39.3) (6.9) 55.8 (24.3) (24.3) (4.6) 56.0 (23.8) (23.8) (4.6) 44.0 (99.6) (99.6) (4.6) (4.6) 26.9 $7.41 (4.6) 27.6 $3.65 73.1 68.5 12.9 $5.29 23.5 18.9 (6.5) $9.32 (6.9) 7.8 $11.08