EPS (option 1)

Hi all,

From the video course 2, unit 3, lesson 5 - Determining the intrinsic value of a stock - at 6:29 then

Earnings (EPS) -------> (option1) Invest or pay debt -------> More Equity or Less Equity.

I do not understand how Earning can lead to less Equity in this case.

Thank you

Comments

  • I am not familiar with the course but....

    Perhaps by increasing earnings from repurchasing stock?

    Reduces equity but could potentially increase earnings and increase book value.
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