Blaine Kitchenware Case Study Answers 1. ABOUT THE COMPANY Blain Kitchenware, Inc. (BKI), founded in , is a mid-sized producer of. View Notes – Blaine Kitchenware Case from FIN at DePaul University. Blaine Kitchenware Questions: 1) Do you believe that Blaines current capital structure. ABOUT THE COMPANY. Blain Kitchenware, Inc. (BKI), founded in , is a mid- sized producer of small appliances for residential kitchens. BKI has an.
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Teaching note supplement software. The management should use the available cash and invest in attractive investments. Would you be in favor of it as a non-family shareholder? Following is the operating results for the year when the capital structure is levered and unlevered.
Net worth in xase Joel Heilprin ; Timothy A Luehrman.
Moreover, the ownership percentage of family has also increased and hence resulting in the more dominant position in the company.
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This is not a very healthy situation for a public company as the interest cas the minority shareholders are sometimes not taken care of. Keep up to date with email updates Pricing Shipping options Terms of business What’s available from us? This page has approximately words.
The payout ratio of the company has been increasingly increasing for the past three years. Although investors take dividend as an indicator for srudy company to succeed, they also expect dividend will be paid continuously at either stable or growing rate. There is a big question facing Blaine and that is why would their existing shareholders want to sell their equity back to the company?
Another scenario is to completely buy-back the market float. 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.
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.
Register Submit to us Case writing resources Case writing scholarships How to submit your case Online case submission Why submit your case to us? Blaine is currently over-liquid and under-levered and their shareholders are suffering from the effects.
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Why or why not?
Blaine Kitchenware, Inc: Capital Structure | The Case Centre, for educators
Their management will have increased stakes, this will reduce their chance of being acquired and this will provide more dividends to their remaining shareholders.
Essay UK offers professional custom essay writing, dissertation writing xtudy coursework writing service. Interest 0 Earnings Before Tax 77, 74, Less: We have not been given the seperate data for equity share capital and Retained Earnings. Dividend payout ratio 0. However, the company must guard itself from getting over-levered.
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. Our work is high quality, plagiarism-free and delivered on time. About this resource This Business essay was submitted to us by a student in order to help you with your studies.
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Although this will involve the company raising a significant debt, this will also give them complete control to the promoters. In summary, in order for Blaine to keep its current payout policies, they must blainw numbers of outstanding shares throughout share repurchasing.
The blainr capital has been procured at very less cost when compared to equity and hence the WACC has reduced from Attention is also given to the value of interest tax shields. Go to advanced search.
View our pricing guide or login to see prices. Cost of capital when the company is unlevered Dividend per share D1 0.
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. Other Income expense 13, 13, Less: All fields Reference no. How would such a buyback affect Blaine?