American home products currently has zero debt

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Reference no: EM131551630

American Home Products currently has zero debt. Make a case for whether American Home Products should either borrow 30% debt OR 50% debt (the proceeds will be used to buy back some of its stock). I would advise you to create a supporting table showing the following variables for these two debt levels: tax savings, eps, ROE, risk level (no numbers here -- just make some observations about how AHP's strategy industry, culture, etc...makes it a high or low risk firm), bond rating.

Reference no: EM131551630

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