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Increasing leverage will be beneficial for shareholders

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You are the CFO of an all-equity financed firm. Now, you are evaluating a capital restructuring plan to issue some debt and use the proceeds to repurchase some shares. How will the earnings per share (EPS) change with respective to the leverage change? In what circumstances, increasing leverage will be beneficial for shareholders? In what circumstances, increasing leverage will hurt shareholders?

Reference no: EM132423135

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