CMR has no debt. The stock's beta, BE, is 1.5 and its expected profitability, RE, is 15%. The company decides to go into debt at the risk-free rate, Rf, of 5% to buy back 50% of its shares. Capital markets are supposed to be perfect. What is the effect of the share buyback on the PER (Price earning ratio) Options for question 22: PER will drop No change in PER since the value of the firm does not change PER will increase