Question:
Beta industries has net income of $2,000,000 and it has 1,000,000 shares of common stock outstanding. The company's stock currently trades of $32 a share. Beta is considering a plan where it will use available cash to repurchase 20 percent of its shares in the open market. The repurchase is expected to have no effect on either net income or the company's P/E ratio. What will be its stock price following the stock repurchase?