Based on calculation above if the company repurchases its stocks by $ 8 per share. The stock price in the market will be $ 8.3733 per share. This action is not too attractive to the investors because the stock price after repurchases is almost the same as the stock price currently trading in market ($ 8 per share). Therefore the investors do not get much of benefits from this option.
• The pro of stock repurchase:
By repurchasing of stocks, the amount of shares outstanding will decrease; it makes the EPS increase and finally the DPS increase as well. It makes the market price of stock will also increase. Based on t he theory the capital gain from repurchases of stock must be equal with the dividends should be paid.