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Question
A company's capital structure consists of common stock only, which amounts to $14 million. However, this year, the company plans to issue $7 million of debt, and use the proceeds to repurchase $7 million of its existing equity. The stock repurchase should not change the size of the company. As a result, any change in the firm's earnings per share (EPS) must be a result of the change in its:
a. level of operations.
b. beta coefficient.
c. EPS coefficient of variation.
d. capital structure.
e. EPS standard deviation.
Answer
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Related questions
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