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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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My account New to The Case Centre? Since they are totally equity financed, there is no tax lbaine. Tax ID No There are three issues of senior unsecured notes, one floating rate note, one equity offering, and one convertible note.

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. Acquirers could pay way less than they originally expect to buy out the firm.

They also have to consider of the effect of the repurchase on various factors like the risks involved in raising a debt especially when they are large, very conservative and debt free.


Using a perfect leverage is always beneficial for a company as it allows to decrease the cost of capital. Our work is high quality, plagiarism-free and delivered on Essay UK – http: Access this item You must be logged in to access preview copies.

Finance Globalization Health Care. Secondly, beginning in the s, Blaine gradually moved its production abroad.

It means Bliane has large financial surpluses and play a bad financial leverage. According to their current situation we do not think their current capital structure and payout policies are appropriate. However, concluding whether an unlevered or a levered capital kitchennware is appropriate for a company largely depends on the industry debt equity ratio i.

This page has approximately words. Both solutions improve the financial level benefit and maximize the company value. What are the primary advantages and blaie of such a move?

Blaine Kitchenware, Inc: Capital Structure | The Case Centre, for educators

Only twice in its history had the company borrowed beyond seasonal working capital needs. As a non family inc.cwpital, the stock repurchase will make me more skeptical because the shares owned by the family is rising exponentially and hence making it more dominant. The company must determine the optimal debt capacity and capital structure, and subsequently estimate the resulting change in firm value and stock price.


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Blaine Kitchenware, Inc.: Capital Structure (Brief Case)

This is the main issue which Victor Dubinski has to deal with. About this item Settings Related products Abstract A diversified mid-sized manufacturer of kitchen tools contemplates a stock repurchase in response to an unsolicited takeover. Would you be in favor of it as a non-family shareholder? This shows that the company has been keen on less retention of money to further invest.

The justification can be drawn from the diminishing returns for the last three years. Finance, Accounting and Control. BKI can borrow money to buy back its own shares or use its funds to repurchase shares.

Blaine Kitchenware, Inc is over liquid and under-levered.