BLAINE KITCHENWARE INC.CAPITAL STRUCTURE PDF

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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Blaine Kitchenware Inc Exhibits Stephanie Zepeda | Stephanie Zepeda –

Product details Share this page: 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. BKI has a substantialliquidity. The company must determine the optimal debt capacity and capital structure, and subsequently estimate structude resulting change in firm value and stock price.

We have not been given the seperate data for strucgure share capital and Retained Earnings. Register Submit to us Case writing resources Case writing scholarships How to submit your case Online case submission Why submit your case to us? The company was particularly keen to increase its presence in the beverage appliance segment, which demonstrated the strongest growth and where Strucyure was weakest.

However, concluding whether an unlevered or a levered capital structure is appropriate for a company largely depends on the industry debt equity ratio i. How would such a buyback affect Blaine?

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them. Blaine Kitchenware, Inc is over kitchwnware and under-levered. The justification can be drawn from the diminishing returns for the last three years. Teaching note supplement software. Just complete our simple order form and you could have your customised Business work in your email box, in as little as 3 hours. A 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.

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Blaine Kitchenware by Rui Wang on Prezi

In summary, in order for Blaine to keep its current payout policies, they must structurs numbers of outstanding shares throughout share repurchasing. Debt being a cheap source of finance and given the industry standards confirming the availability of the debt as well as the conformity by strutcure rivals in subscribing to the debt capital, it seems wise to have a levered capital structure instead of having a completely unlevered one as it would have affected the cost of capital of the company.

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. InBlaine planned to continue its policy of holding prices firm in the face of competitive pressures.

Finance, Accounting and Control.

Attention is also given to the value of interest tax shields. Luehrman and Joel L. Any orders placed during this time will be dealt with kichenware we open again on 2nd January.

Kitchebware Structure Brief Case. Margins declined due to integration costs and inventory write-downs associated with recent acquisitions. Accounting essays Architecture essays Business essays Coursework Economics essays Education essays Engineering essays English language essays English literature essays. Compare the two ways, Debt financing will produce the interest tax shield,simultaneously will produce moreinterestsandincrease the management risk Plan of action Our team choose that BKI ues its funds to repurchase shares.

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Interest 0 Earnings Before Tax 77, 74, Less: The company has been earning less profits and hence it ktchenware of the opinion of distributing the profits to shareholders instead of retaining it for further investments.

All fields Reference no.

It is a form of returning the money back to shareholders and the shareholders who are out there for investment purposes feel it a better option to stay their money invested in a growing company instead of receiving petty dividends. You can change your cookie settings at any time but parts of our site will not function correctly without them. The case is set in earlynearly two years after significant modifications in these systems and procedures. In Blaine still planned to continue its policy of holding prices firm in the face of competitive pressures.

Other Income expense 13, 13, Less: Only twice in its history had the company borrowed beyond seasonal working capital needs. About this resource This Business essay was submitted to us by a student in order to help you with your studies.