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Who is right the CFO or the board member

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Question - The CFO is proposing that her company issues debt to repurchase shares, because the company's current leverage ratio is only 10% and the CFO believes that increasing leverage will increase company value as well. But a board member complained about this strategy, arguing that issuing debt only makes sense if the company invests the cash in a positive NPV project. Who is right, the CFO or the board member?

Reference no: EM132863648

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