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A company with a share price of $74 has shares outstanding of 5 million and net income of $16 million. The company conducts a leverage
A company with a share price of $74 has shares outstanding of 5 million and net income of $16 million. The company conducts a leverage recapitalization to alter its capital structure by borrowing $3 million and using the proceeds to buy back shares. The pre-tax cost of debt is 7% and the company's tax rate is 27%.
What will be the new earnings per share after the leverage recapitalization?
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