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A public company has 220m shares outstanding, Net Income of 110m, current share price is 20. The firm takes on 200m of debt at 10%

  • A public company has 220m shares outstanding, Net Income of 110m, current share price is 20. The firm takes on 200m of debt at 10% interest to buy back shares. Tax rate is 30%.
  • Question: Is the operation accretive or dilutive?

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