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QUESTION
A company can borrow funds at an after-tax cost of 4. The company's stock price is $40 per share, earnings per share is $2.00, and the company has 15...
A company can borrow funds at an after-tax cost of 4.5%. The company's stock price is $40 per share, earnings per share is $2.00, and the company has 15 million shares outstanding. If the company borrows just enough to repurchase 2 million shares of stock at the prevailing market price, what is likely to occur to its EPS?
