Question: Devon Ltd.'s common stock is trading at $40 and has an estimated price to earnings (P/E) ratio of 32. price to earnings (P/E) ratio is

Devon Ltd.'s common stock is trading at $40 and has an estimated price to earnings (P/E) ratio of 32. price to earnings (P/E) ratio is estimated at 32. If Devon borrows funds to repurchase shares at its after-tax cost of debt of 5%, it is likely that its earnings per share will be If Devon borrows funds to repurchase shares at its after-tax cost of debt of 5%, it is likely that its earnings per share will:

Options for Question :

A. increase.

B. decrease.

C. stay the same.

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