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Corporate Finance

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Nolan is in favor of a share repurchase. He argues that a repurchase will increase the company’s P/E ratio, return on assets, and return on equity. Are his arguments correct? How will a share repurchase affect the value of the company?

  • Corporate Finance -

    IF Price/share and Earnings per Share are based on outstanding shares, how can repurchase affect P/E, as both are changed the same by changing number of shares.

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