Share Repurchase Effect On EPS

This problem practices how a share repurchase flows through the income statement and the EPS calculation, which is a common test of accounting judgment in investment banking interviews. Candidates need to think about both sides of the effect: the reduction in diluted share count and the potential loss of interest income if cash is used to fund the buyback. Interviewers ask this because they want to see whether you can connect transaction mechanics to per share metrics and explain why the result depends on the source of funding and the economic tradeoffs involved.