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Question 12 1 pts Pinder Co is currently unlevered and has 4 million shares issued, which are trading for $5 each. Pinder Co's earnings are
Question 12 1 pts Pinder Co is currently unlevered and has 4 million shares issued, which are trading for $5 each. Pinder Co's earnings are expected to be $2 million. If Pinder Co borrows $2 million at 19% interest to buy back shares at $5, how much will the ROE change (in percentage points) for Pinder Co's shareholders? (For example, if ROE goes from 15% to 25%, it is a 10% improvement in percentage points.) Assume that there are no taxes and that all earnings are paid out as dividends. 1.5% 0 -1% O 1% O None of the other answers are correct. O 2%
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