Some investors think that the Rumple Shirt Co.’s repurchase program wa

Some investors think that the Rumple Shirt Co.’s repurchase program was a bad deal for shareholders, because the company paid too much for its repurchased shares.

Before the repurchase, the company’s shares traded for $30. Over the last quarter, Rumple repurchased 150 million shares (15% of shares outstanding) at an average price of $33 per share. Shares outstanding are now 850M. Calculate the stock price after the repurchase. If you bought 100 shares prior to the repurchase, and sold the same percentage of shares as Rumple repurchased (for the same price they paid), then what is your profit (loss) on the investment? (Assume that you sold the non-repurchased shares at the post-repurchase price.)
A) -$52.94
B) -$26.02
C) $0
D) $45
E) $300

ANSWER

C