uded debt i t will increa

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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4

Titas Gas went through recapitalization. They
included debt in their capital structure. This
debt will increase their EPS and ROE. Do you
agree or disagree with this statement. Explain
briefly.
Suppose Renata Pharmaceuticals have
some excess cash. They can pay this cash
as dividend or repurchase some shares
from the market. Explain how the market
value of Renata remains same
irres
tive of any decision made.
Your answer
Titas Gas went through recapitalization.
They included debt in their capital
structure. This debt will increase their EPS
and ROE. Do you agree or disagree with
this statement. Explain briefly.
Transcribed Image Text:Titas Gas went through recapitalization. They included debt in their capital structure. This debt will increase their EPS and ROE. Do you agree or disagree with this statement. Explain briefly. Suppose Renata Pharmaceuticals have some excess cash. They can pay this cash as dividend or repurchase some shares from the market. Explain how the market value of Renata remains same irres tive of any decision made. Your answer Titas Gas went through recapitalization. They included debt in their capital structure. This debt will increase their EPS and ROE. Do you agree or disagree with this statement. Explain briefly.
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