How would eps be impacted if the firm borrowed money

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Reference no: EM132061006

The METB Company is planning a $100 million share repurchase. Its current stock price is $40 per share, and there are 16 million shares outstanding prior to the repurchase. Earnings per share without the repurchase would be $3 per share. How would EPS be impacted if the firm borrowed the money for the repurchase at 10% and the tax rate is 35%? What if the rate on the borrowed funds was 12%.

Reference no: EM132061006

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