Evaluation on Share Repurchase Proposal of Blaine Kitchenware Inc. Group 7 Contents Executive Summary 3 Overview of problems 3 Analysis on Capital Structure & Payout Policies of Blaine 3 1. Inappropriate current capital structure and payout policies 3 2. Advantages and disadvantages of large share repurchase proposal 4 a. Effects of share repurchase on assets‚ liabilities and equity on balance sheet 5 b. Effects of share repurchase on debt ratios and interest coverage ratio 5 c. Effects of
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Blaine Kitchenware Inc. Looking at the Financial statements of Blaine Kitchenware Inc.‚ in the balance sheet in particular in this case‚ I would say that BKI is a highly over-liquid and under-levered company. In the balance sheet‚ Exhibit 2‚ Cash and Cash equivalents and marketable securities was $66‚557‚000 and $164‚309‚000 respectively. With such high cash balance and marketable securities at hand‚ BKI is not only risking its own growth but also risk turning away investors who may consider
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Blaine Kitchenware Case Study Answers 1. ABOUT THE COMPANY Blain Kitchenware‚ Inc. (BKI)‚ founded in 1927‚ is a mid-sized producer of small appliances for residential kitchens. BKI has an approximate 10% market share of the $2.3 billion U.S. market for small kitchen appliances‚ with 65% of sales originating from the US market. The company is public since 1994‚ and the majority of the shares is controlled by the founder’s family (62% of outstanding shares)‚ who also have a strong representation in
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you believe Blaine’s current capital structure and payout policies are appropriate? Why or why not? According to the current situation‚ we think Blaine’s current capital structure and payout policies are not appropriate. capital structure： Blaine is currently over-liquid and under-levered. In this case‚ Blaine’s shareholders are suffering from the effects. Because Blaine is a public company with large portion of its shares held by conservative family members‚ Blaine has huge financial surplus
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Pfizer Inc.’S Cost of Capital and Capital structure - Xiaoyue Shi The costs of capital and capital structures for Pfizer Inc. and its two competitors Merck & Co. Inc. and Johnson & Johnson in the pharmaceutical industry are analyzed in this memo. When calculating the cost of common stock for the three companies‚ three different approaches including Capital Asset Pricing Model (CAPM)‚ Discounted Cash Flow (DCF) and the bond yield plus risk premium are applied (Appendix A). For CAPM approach
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Blaine Kitchenware is a company that has occupied the industry for over 80 years and continues to gain control in the market it occupies. As the CEO of the company‚ Mr. Dubinski is dealing with a challenging decision of determining what is best for the family company. He currently feels that the capital structure of the company needs adjustment. He is contemplating the idea of decreasing his equity while increasing his debt in order to increase the value of the company. Dubinski is attempting to
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Executive Summary: In summary‚ recommendation by the banker to buy back 14 million outstanding shares of Blaine Kitchenware with $ 50 million debt and $209 million cash in hand would result in following financial metric changes: * Increase the value of the firm through the benefit of tax shield from current $960million to $1.063billion. * The offer results in 3% increase in EPS from $0.91 to $0.93 based on 2006 financial numbers. * An increase of 7.3% on ROE from 11% to 18.3% based
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Company Information My company choice is Nike Inc. (Nike)‚ a multinational sports footwear‚ equipment and apparel manufacturing company based in Oregon‚ United States. This puts Nike in the apparel industry. In 2010‚ Forbes rated Nike as the top sports business with a total value of $10.7 billion. The most effective marketing strategy Nike employ is the sponsorship agreements they have with numerous top athletes in a variety of sports. Operating Risks of Nike When Nike was initially
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Capital Structure 7 July 2013 Introduction The capital structure for a company can be very important for the success of the company. Many aspects of the business must be evaluated in order to determine the appropriate capital structure. Throughout this paper‚ three companies will be evaluated. The three companies being evaluated are eBay (NasdaqGS: EBAY)‚ The Clorox Company (NYSE: CLX)‚ and Alaska Air Group Inc. (NYSE: ALK). Company Overview eBay is a very popular company
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