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A diversified mid-sized manufacturer of kitchen tools contemplates a stock repurchase in response to an unsolicited takeover. The company must determine the. BLAINE KITCHENWARE Case Exhibit 1 Operating Results: . beta calculation is based on a constant capital structure 1 Un-levered beta is the . 年5月14日 Blaine Kitchenware:Capital Structure Summary: Blaine Kitchenware, Inc. was founded in and as a mid-sized producer of branded small.

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Another scenario is to completely buy-back the market float. Following is the operating results for the year when the capital structure is levered and unlevered.

Cite View Details Purchase Related. The management should use the available cash and invest in attractive investments. Since they are totally equity financed, there is no tax shield. Business and Environment Business History Entrepreneurship. Tax ID No However, concluding whether an unlevered or a levered capital structure is appropriate for a company largely sstructure on the industry debt equity ratio i. The company must determine the optimal debt capacity and capital structure, and subsequently estimate the resulting change in firm value and stock price.

Blaine Kitchenware, Inc is over liquid and under-levered. My account New to The Case Centre? Please find below the full details of the product you clicked a link to view.

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Why or why not? Interest 0 Earnings Before Tax 77, 74, Less: Blaine is currently over-liquid and under-levered and their shareholders are suffering from the effects. Teaching Note HBS Case Collection January Revised October Tombstones This case consists primarily of excerpts from term sheets and prospectuses for six securities offerings made by US companies duringjust after the financial crisis and recession of Access this item You must be logged in to access preview copies.

Margins declined due to integration costs and inventory write-downs associated with recent acquisitions. The modifications to its capital budgeting procedures are partly intended to support the company’s efforts to continue this success.

The Case Centre is dedicated to advancing the case method worldwide, sharing knowledge, wisdom and experience to inspire and transform business education across the globe. There are UK writers just like me on hand, waiting to help you. Capital Structure Brief Case.


There is a big question facing Blaine and that is why would their existing shareholders want to sell their equity back to the company? All fields Reference no. Finance, Accounting and Control. Their management will have increased stakes, this will reduce their chance blsine being acquired and this will provide more dividends to their remaining shareholders.

We are completely closed on Tuesday 1st January. View our pricing guide or login to see prices. Cite View Details Educators Purchase. This is the main issue which Victor Dubinski has to deal with. Since Blaine Kitchenware is a public company with large portion of its shares held by their family members, they have a financial surplus, which decreases the efficiency of its leverage.

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In Blaine still planned to continue its policy of holding prices firm in the face of competitive pressures. Attention is also given to the value of interest tax shields.

Moreover, the ownership percentage of family has also increased and hence resulting in the more dominant position in the company.

Cite View Details Purchase. There are three issues of senior unsecured notes, one floating rate note, one equity offering, and one convertible note. Joel Heilprin ; Timothy A Luehrman. Stryker has compiled a remarkable track record of consistently high growth in profitability over more than 20 years. You can change your cookie settings at any time but parts of our site will not function correctly without them.

Blaine Kitchenware Inc Exhibits Stephanie Zepeda | Stephanie Zepeda –

Cost of capital when the company is unlevered Ke If you are the original author of this content and no longer wish to have it published on our website then please click on the link below to request removal:. Compare the two ways, Debt financing will produce the interest tax shield,simultaneously will produce moreinterestsandincrease the management risk Plan of action Our team that BKI ues its funds to repurchase shares.


Although investors take dividend as an indicator kutchenware a company to succeed, they also expect dividend will be paid continuously at either stable or growing rate. Essay UK – http: We have not been given the seperate data for equity share capital and Retained Earnings. In other words, Blaine does not fully utilize its funds. This shows that the company has been keen on less retention of money to further invest.

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The case is set in earlynearly two years after significant modifications in these systems and procedures. The company must determine the optimal capital structure, and estimate the resulting change in firm value and stock price. Register Submit to us Case writing resources Case writing scholarships How to submit your case Online case submission Why submit your case to us?

BKI can borrow money to buy back its own shares or use its funds to repurchase shares. Luehrman This case examines some parts of Stryker Corporation’s systems and procedures for approving and authorizing capital blaone of many different types, including buildings, machinery, and working capital for existing businesses, as well as transactions with third parties such as acquisitions, joint ventures, and licensing agreements.

The debt capital has been procured blaihe very less cost when compared to equity and hence the WACC has reduced from This is not a very healthy situation for a public company as the interest of the minority shareholders are sometimes not taken care of. The company has been earning less profits and hence it is of the opinion of distributing the profits to shareholders instead of retaining it for further investments.

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