Devon Ltd. common shares sell at ($40) a share and their estimated price-to-earnings ratio (P/E) is 32.
Question:
Devon Ltd. common shares sell at \($40\) a share and their estimated price-to-earnings ratio (P/E) is 32. If Devon borrows funds to repurchase shares at its after-tax cost of debt of 5%, its EPS is most likely to:
A. increase.
B. decrease.
C. remain the same.
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The answer is most likely C remain the same Heres why A P...View the full answer
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Related Book For 
Corporate Finance A Practical Approach
ISBN: 9781118217290
2nd Edition
Authors: Michelle R Clayman, Martin S Fridson, George H Troughton, Matthew Scanlan
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