The chapter opener describes a shift in Apple’s financial strategy that began in 2012. Specifically, Apple took actions that (modestly) increased its reliance on debt. The following table shows Apple’s annual revenues (in millions) and its earnings per share (EPS) for a few years before and a few years after the company began changing its capital structure. Use these figures to answer the questions.

2010 2011 2012
Revenues $   65,225  $108,249 $156,508
EPS $      2.16 $      3.95 $      6.31
2014 2015 2016
Revenues $182,795  $233,715  $215,091
EPS $   6.49 $      9.28 $       8.35
  1. Now that the company has decided to use the proceeds from a bond issue to repurchase shares, what would you expect the effect of ...

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