A company has 10,000 shares of Rs 20 each. It expects a total earning of Rs 40,000, half of which it plans to distribute as dividend. This means that the eps is Rs 4 and the dividend per share, if...

A company has 10,000 shares of Rs 20 each. It expects a total earning of Rs 40,000, half of which it plans to distribute as dividend. This means that the eps is Rs 4 and the dividend per share, if distributed, is Rs 2. If the company plans to repurchase 1,000 shares through a tender offer at a price of Rs 22 per share, the increase in the share price as a sequel to repurchase will be equal to the amount of dividend.