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Question 7 Repurchasing shares has no effect on the number of shares outstanding or on earnings...

Question 7

  1. Repurchasing shares

    has no effect on the number of shares outstanding or on earnings per share.

    increases the number of shares outstanding and increases earnings per share.

    reduces the number of shares outstanding and increases earnings per share.

    reduces the number of shares outstanding and reduces earnings per share.

    increases the number of shares outstanding and decreases earnings per share.
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Answer #1

Repurchase Shares reduces the number of shares outstanding and increases earnings per share.

Because when the share are repurchases Net income remains unchanged and the number of shares outstanding decreases and it effects the Earnings Per Share.

The other options are wrong because of the above mentioned reason..

If you have any doubts please comment on the answer.

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