Question
Number of share = 100,000 Price per share = $10 market value of shares = $1 million Calculate the ratio of price to expected earnings
Number of share = 100,000
Price per share = $10
market value of shares = $1 million
Calculate the ratio of price to expected earnings for River Cruises both before and after it borrows the $250,000. Why does the P/E ratio fall after the increase in leverage?
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Fundamentals of Multinational Finance
Authors: Michael H. Moffett, Arthur I. Stonehill, David K. Eiteman
5th edition
205989756, 978-0205989751
