During the 1990s and 2000s, many firms repurchased stock and borrowed to do so. (i) What is the typical effect of stock repurchases on earnings per share growth and return on common equity? (ii) Predict how a firm that excessively engaged in these practices would have fared in the downturn in 2008?
During the 1990s and 2000s, many firms repurchased stock and borrowed to do so. (i) What is the typical effect of stock repurchases on earnings per share growth and return on common equity? (ii) Predict how a firm that excessively engaged in these practices would have fared in the downturn in 2008?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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During the 1990s and 2000s, many firms repurchased stock and borrowed to do so.
(i) What is the typical effect of stock repurchases on earnings per share growth and return on common equity?
(ii) Predict how a firm that excessively engaged in these practices would have fared in the downturn in 2008?
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