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Answer #1

Current EPS = Net Income/Number of shares

= 4,200,000/720,000

= $5.8333

P/E Ratio = Price per share/Earnings per share

= 19/5.8333

= 3.2571

EPS after repurchase = 4,200,000/630,000 = $6.6666

Hence, market price per share = 6.6667*3.2571 = $21.714

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