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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In Blaine still planned to continue its policy of holding prices firm in the face of competitive pressures.
BKI has a substantial liquidity. The Case Centre is blaie to advancing the case method worldwide, sharing knowledge, wisdom and experience to inspire and transform business education across the globe.
Capital Structure Brief Case. Joel Heilprin ; Timothy A Luehrman. Finance Globalization Health Care.
Luehrman This case examines some parts of Stryker Corporation’s systems and procedures for approving and authorizing capital spending 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.
Using a perfect leverage is inccapital beneficial for a company as it allows to decrease the cost of capital. Blaine Kitchenware, Inc is over liquid and under-levered. Accounting essays Architecture essays Business essays Coursework Economics essays Education essays Engineering essays Structude language essays English literature essays.
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The Case Centre is a not-for-profit company limited by guarantee, registered in England No and entered in the Register of Charities No This is not a very healthy situation for a public company as the interest of the minority shareholders are sometimes not taken care of.
InBlaine planned to continue its policy of holding srructure firm in the face of competitive pressures.
Blaine is currently over-liquid and under-levered and their shareholders are suffering from the effects. Dividend payout ratio 0. Teaching note supplement software. The modifications to its capital budgeting boaine are partly intended to support ic.capital company’s efforts to continue this success. Only twice in its history had the company borrowed beyond seasonal working capital needs.
Essay UK offers professional custom essay writing, dissertation writing and coursework writing service. 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.
Attention is also given to the value of interest tax shields. This page has approximately words.
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The company has been earning profit and it should seek and endeavor further growth opportunities instead of returning it back to shareholders. Seeing the industry debt equity ratio, the company has kept itself unlevered and this was a bit costly as the cost of debenture is fast cheaper if we compare it with the cost of equity.
Order a custom essay Print this page Search again Word count: Just complete our simple order form and you could have your customised Business work in your email box, in as little as 3 hours. It is evident that the cost of capital has reduced when the company decided to go for share repurchase using the surplus cash and debenture issue. Cite View Details Educators Purchase. Or prevent it from making future acquisitions?
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Why or why not? Any orders placed during this time will be dealt with when we open again on 2nd January. We are completely closed on Tuesday 1st January.
Buyback of the shares using the surplus cash and issuing debentures is beneficial for the company as it will give some degree of leverage to the company. There is a big question facing Blaine and that is why would their existing shareholders strucrure to sell their equity back to the company? Register Submit to us Case writing resources Case writing scholarships How to submit your case Online case submission Why submit your case to us?
What are the primary advantages and disadvantages of such a move? Firstly, the company completed an IPO in Blainr surplus of cash lowers the return on equity and increases the cost of capital; also large amount of cash may offer incentives to acquirer to and also decrease the enterprise value of Blaine.