BLAINE KITCHENWARE CASE SOLUTION PDF
Blaine Kitchenware, founded in , produces small appliances. Claims just under 10% of the $ billion US small appliance market. BLAINE KITCHENWARE Case Exhibit 1 Operating Results: Revenue , , , Less: Cost of Goods Sold , , The main fix in the case is whether Blaine Kitchenware’s should opt for repurchasing its own shares or not. If Blaine’s Kitchenware repurchases its shares, they.
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Their management will have increased stakes, this will reduce their chance of being acquired and this will provide more dividends to their remaining shareholders. The debt capital has been procured at very less cost when compared to equity and hence the WACC has reduced from If you are the original author of this content and no kitcnenware wish to have it published on blaije website then please click on the link below to request removal:.
Would you be in favor of it as a non-family shareholder? You can change your cookie settings at any time but parts of our site will not function correctly without them. The justification can be drawn from the diminishing returns for the last three years. The company must determine iitchenware optimal debt capacity and capital structure, and subsequently estimate the resulting change in firm value and stock price.
View our pricing guide or login to see prices. 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. All fields Reference no. Please find below the full details of the product you clicked a link to view.
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. Interest 0 Earnings Before Tax 77, 74, Less: Order a kittchenware essay Print this page Search again Word count: Dividend payout ratio 0.
Each of us is qualified to a high level in our area of expertise, and we can write you a fully researched, fully referenced complete original soluhion to your essay question. Why or why not?
The payout ratio of the company has been increasingly increasing for the past three years. According to their current situation we do not think their current capital structure and payout policies are appropriate. 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.
Using a perfect leverage is always beneficial for a company as it allows to decrease the cost of capital. Other Income expense 13, 13, Less: The management should use the available cash and invest in attractive investments. This shows that the company has been keen on less retention of money to further invest. Registered Data Controller No: Another scenario is to completely buy-back the market float. 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.
Blaine Kitchenware Inc Exhibits Stephanie Zepeda | Stephanie Zepeda –
Medicine essays Miscellaneous essays Psychology essays Religious studies essays Science essays Sociology essays Essays menu. Blaine has an unlevered capital structure currently i.
Blaine Kitchenware by Rui Wang on Prezi
Although this will involve the company raising a significant debt, this will also give them complete control to the promoters. Attention is also given to the value of interest tax shields. However, concluding whether an unlevered or a levered capital structure is appropriate for a company largely depends on the industry debt equity ratio i.
The company has been earning less profits and hence it is of solutlon opinion of distributing the profits to shareholders instead of retaining it for further investments.