Impact of Dividends and Repurchases on Financial Ratios

A company, Alpha Corp, recently announced a special dividend of $5 per share and a simultaneous share repurchase program amounting to $10 million. Prior to these actions, Alpha Corp had 2 million shares outstanding and a market price of $30 per share. Investors are curious about how these corporate actions will impact the company’s financial ratios, specifically its debt-to-equity ratio, return on equity (ROE), and earnings per share (EPS).

Consider the following financial adjustments:

1. The special dividend decreases cash by $10 million.
2. The share repurchase will reduce the number of shares outstanding. However, the market price of the shares is unaffected immediately by the repurchase.

Evaluate how these corporate actions affect the financial ratios mentioned above.