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A: Discuss to what extent any change in the return on common stockholders equity was the result of increased reliance on debt. B: Does it
A: Discuss to what extent any change in the return on common stockholders equity was the result of increased reliance on debt.
B: Does it appear that the purchase of treasury stock and the shift toward more reliance on debt were wise strategic moves?
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During a recent pericd, the fast food chain Wendy's International purchased many treasury shares. This caused the number of shares autstanding to fall from 124 million to 105 million. The following infarmation was drawn from the company's financial statcments (in mllions) Information for Year after of Treasury Stock Information for the Yenr hefore Purchace of Treasury Stock Net incurne Total comman stockcholders equity Averaga common stodcholders' equity Cash provided by uperation:s Cash dividends paid on common stock Avaraga numher of common shares outstanding
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