NO.PZ2018101501000121
问题如下:
Company M has 10 million shares of outstanding stock. Currently, the earning per share is $2.50. If Company M repurchases $50 million at the current share price of $25 per share by borrowing the funds at an after-tax cost of 8%, what`s the change in earning per share after the repurchase?
选项:
A.
It would remain the same.
B.
It would decrease.
C.
It would increase.
解释:
C is correct.
考点:Share Repurchases
解析:M公司earnings yield = EPS/Share price = 2.5/25 = 10%,大于8%,因此回购完的EPS将会上升。
老师,借着这题问一下,这两个指标的区别?是不是前者分母是Book Value,后者分母相当于是Fair Value?这么理解可以吗?还有其他的区别吗?