Finance - EPS After a Stock Buyback?

Company ABC plans to borrow $10 million, which is will use to purchase 100,000 of their 1,100,00 shares currently outstanding.

The following information is available:

Share price at the time of the buyback: $40

EPS before the buyback: $4

Earnings Yield: 10%

After excise cost of borrowing: 6%

EPS after the stock buyback will be closest to:

A $3.76

B $4.00

C $4.16

D $4.40

I can't decide between A or D.

Calculating
3.8=(4.4m-600k)/1m
Or
Calculating 4.4=(4.4m)/1m
=(44m/1m)*.1

I'm not sure as to whether A/T borrowing costs refer to costs incurred from borrowing or to an A/T cost of debt wherewithal;
because in the latter skin the costs would not be incurred until the following reporting period.

Let me know what you ponder, also if I am missing something let me know. Thanks surrounded by advance.

What's the best stock right presently do you devise that have the GREATESTS POTENTIAL TO GROW?

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Answers:   My friend.

If a company buys put money on 100,000 shares it is reducing the shares outstanding in the subsidiary market by 100,000. The company's returns do not change.

Therefore the sums for EPS is Earnings / Shares outstanding.

Earnings = EPS * Shares Outstanding = 4.4million.

Shares Outstanding after buyback = 1.1M - 100,000 = 1million

New EPS = 4.4M / 1M = $4.4 = D is the answer.

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