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An all-equity firm with $8,000 in assets and 4,000 shares outstanding expects earnings per share (EPS) to be $0.05 or $0.15 depending on whether the

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An all-equity firm with $8,000 in assets and 4,000 shares outstanding expects earnings per share (EPS) to be $0.05 or $0.15 depending on whether the economy is in a recession or boom, respectively. However, the firm is contemplating issuing $6,000 in debt at 6% interest to repurchase stock. You own 12 shares of this company's stock (that you paid for out-of-pocket). If the company decides not to restructure and but you strongly support the above restructuring, how could you create the proposed (levered) capital structure in your own portfolio using homemade leverage? Verify that your personal ROE outcomes are equivalent to those of the levered firm assuming no taxes

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