Impact of Debt on P/E

Makes sense that borrowing debt would decrease NI, but on the other hand I have read that it would increase EPS (source), how? How can the NI decrease but EPS increase? 

Also, would the overall impact be to reduce P/E as Net Income increases but market cap would remain unchanged if you raise debt (and vice versa for deleveraging)? Thank you. 

1 Comments
 

In et sint fuga nobis hic sit modi. Repellat sed molestiae optio quas qui sint itaque.

Neque molestiae dolor eos occaecati. Aspernatur atque omnis enim similique reiciendis officia doloribus. Perspiciatis omnis et sit. Saepe officiis sit minus non voluptatem ratione.

Ratione enim laudantium qui. Laboriosam aut ea nisi doloribus totam id qui blanditiis. Totam est laudantium consequuntur odit odit officiis dignissimos.

Explicabo omnis laboriosam laborum autem. Atque explicabo voluptatibus id. Ad molestiae recusandae non autem est libero ut.

Career Advancement Opportunities

August 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • JPMorgan 01 98.3%
  • Morgan Stanley 08 97.8%
  • Goldman Sachs 02 97.2%

Overall Employee Satisfaction

August 2026 Investment Banking

  • Moelis & Company No 99.4%
  • Evercore No 98.9%
  • Morgan Stanley 01 98.3%
  • Banco Santander 02 97.8%
  • BMO Capital Markets 12 97.2%

Professional Growth Opportunities

August 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • Morgan Stanley 06 98.3%
  • Goldman Sachs 01 97.8%
  • JPMorgan 01 97.2%

Total Avg Compensation

August 2026 Investment Banking

  • Vice President (16) $429
  • Associates (47) $258
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (25) $178
  • Intern/Summer Associate (14) $159
  • 1st Year Analyst (83) $151
  • Intern/Summer Analyst (74) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
Secyh62's picture
Secyh62
99.0
3
BankonBanking's picture
BankonBanking
99.0
4
kanon's picture
kanon
99.0
5
DrApeman's picture
DrApeman
98.9
6
CompBanker's picture
CompBanker
98.9
7
dosk17's picture
dosk17
98.9
8
GameTheory's picture
GameTheory
98.9
9
Betsy Massar's picture
Betsy Massar
98.9
10
Mimbs's picture
Mimbs
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”