Question: Devon Ltd. common shares sell at $40 a share and their estimated price-to-earnings ratio (P/E) is 50. If Devon borrows funds to repurchase shares at

Devon Ltd. common shares sell at $40 a share and their estimated price-to-earnings ratio (P/E) is 50. If Devon borrows funds to repurchase shares at its after-tax cost of debt of 2%, its EPS is most likely to increase or decrease?

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