Let's call the whole thing off
Quote:
Originally Posted by
percy
No.
ROE increases.
Interest paid on bonds is debuctible.
Quote:
Originally Posted by
winner69
No
Yes - ROE does increase
Yes - I know interest is tax deductible
But - NPAT reduces by amount of interest paid on bonds (after tax) ---> means value of dividends paid out is reduced by same amount.
You might see a higher dividend per share but with the lower number of shares your $ dividend is less (assuming everything else remains constant)
po-ta-toe, po-tah-to
to-ma-toe, to-mah-to
You can not beat a good debate on semantics.
Best Wishes
Paper Tiger