Calculate the ratio of price to expected earnings for River Cruises both before and after it borrows

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Calculate the ratio of price to expected earnings for River Cruises both before and after it borrows the $250,000. Why does the P /E ratio fall after the increase in leverage?

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Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

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Question Posted: Nov 14, 2017 02:28 AM

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Calculate the ratio of price to expected earnings for River Cruises both before and after it borrows

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Share price 10 From Table 161 with no leverage there are 100000 shares o...View the full answer

Fundamentals of Corporate Finance

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