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If a company add debt to is financials to repurchase shares how it affect the company price per share? I know we should add (debt*tax
If a company add debt to is financials to repurchase shares how it affect the company price per share?
I know we should add (debt*tax rate/ shares outstanding) to the initial price but what is the thinking/rationale for using that formula? In other words, if tax shield is interest rate*debt*tax rate why to calculate the new price per share when issuing 15% debt we add back only (debt*tax rate/ shares outstanding)?
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