Impact of Share Repurchase on Financial Ratios

Alice Inc. is a publicly traded company that recently announced a significant share repurchase plan, indicating that they will buy back 10% of their outstanding shares over the next year. Prior to the announcement, Alice Inc. had 1,000,000 shares outstanding, a net income of $2,000,000, and total equity of $10,000,000. The company plans to use cash reserves to fund this repurchase.

Investors are concerned about how this move might affect various financial ratios. Specifically, they are particularly interested in the return on equity (ROE), earnings per share (EPS), and debt-to-equity ratio (D/E). Given the financial data provided, what can be inferred about the impact of the share repurchase on these ratios?