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Consider the following statements: Statement 1: When a company repurchases stock with idle cash, the higher the price at which it repurchases its stock relative
Consider the following statements: Statement 1: When a company repurchases stock with idle cash, the higher the price at which it repurchases its stock relative to the current market price, the more significant the increase in EPS. Statement 2: When a company repurchases stock with borrowed funds, if the cost of borrowing is lower than the company's dividend yield, EPS will rise after the repurchase. Which of the following is most likely? O Both statements are incorrect. O Both statements are correct. O Only one statement is correct
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