Assume Watawa Inc., a private corporation with a small number of shareholders, had issued 20,000 common shares at incorporation at a price of $22.00...

Assume Watawa Inc., a private corporation with a small number of shareholders, had issued 20,000 common shares at incorporation at a price of $22.00 each. The book value per share was $34.00 at the most recent year end. The company has been paying an annual dividend of $1.56 per share. Recently, the company had offered to repurchase 3,000 shares at $28.00 per share.

You and a friend bought 100 shares each when the shares were issued. Your friend wonders whether she should sell her shares back to Watawa Inc. since the company was offering 27 percent more than she had paid.

Required Analyze the information provided to help your friend decide whether or not she

should sell her shares back to the company.