3. Corporate leverage (S16-2) Suppose that Macbeth Spot Removers issues only $2,500 of debt and uses the
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3. Corporate leverage (S16-2) Suppose that Macbeth Spot Removers issues only $2,500 of debt and uses the proceeds to repurchase 250 shares.
a. Rework Table 16-2 to show how earnings per share and share return now vary with operating income.
b. If the beta of Macbeth’s assets is 0.8 and its debt is risk-free, what would be the beta of the equity after the debt issue?
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Related Book For 
Principles Of Corporate Finance
ISBN: 9781264080946
14th Edition
Authors: Richard Brealey, Stewart Myers, Franklin Allen, Alex Edmans
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