Question
please help quickly will upvote the answer CMR has no debt. The stock's beta, BE, is 1.5 and its expected profitability, RE, is 15%. The
please help quickly will upvote the answer
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)
a)PER will drop
b)No change in PER since the value of the firm does not change
c)PER will increase
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Theory Of Constraints Handbook
Authors: James Cox, John Schleier
1st Edition
0071665544, 978-0071665544
