Eps

$ 1.00

$ 1.125

$ 0.91

If we assume that the price earnings ratio remains at 15, the price per share will change in proportion to the earnings per share. Realistically, however, we should expect to see a drop in the price earnings ratio, as the increase in debt makes the equity in the firm riskier. Whether the drop will be sufficient to offset or outweigh an increase in earnings per share will depend upon whether the firm has excess debt capacity and whether, by going to 20%, it is moving closer to its optimal debt ratio.

The Debt Beater System

The Debt Beater System

Learn How You Can End the Fear and Worry Created by Bad Credit and Debt Collectors. Get Out of Debt Quickly and Easily, Right Now. I am going to show YOU how to become a

Get My Free Ebook


Post a comment