Smith School of Business BUFN 740: Capital Markets Fall 2014 Tuesdays and Thursdays Aug 25‚ 2014--Oct 13‚ 2014‚ 1:00pm—2:50pm‚ VMH 1330 Instructor: Yajun Wang Office Hours: Tuesdays and Thursdays 5:00pm-6:00pm Office: VMH 4453 E-Mail: ywang22@rhsmith.umd.edu‚ Office Number: (301) 405-3412 Teaching Assistants: CP Sessions: Qi Xu‚ qi.xu@rhsmith.umd.edu (hold help sessions in CP‚ grade all homeworks and cases for session 0501‚ and grade hw #1‚2‚3 and case #1‚2‚3 for session 0502) DC Sessions:
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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 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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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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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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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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THE FIRM IN THE CAPITAL MARKET PROFESSOR: STEVE JONES 11/10/2013 MEMORANDUM To: Victor Dubinski‚ CEO of Blaine Kitchenware‚ Inc. From: Zhangkai Zhou Kelley School of Business MSA student Subject: Is it a good idea for BKI to repurchase its own stocks? Date: Nov 19‚ 2013 There is a banker pointed out that BKI is currently highly over-liquid and under-levered. He suggested to borrow money and to buy back own shares. In detail‚ the proposal is
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Blaine Kitchenware Inc. | Take-Home Case Assignment BSAD 342 Prof. Vishwakarma | Grady McQuillanJoe MackayMitch ChownAlessandro Galeone | Discussion questions * Do you believe Blaine’s current capital structure and payout policies are appropriate? Why or why not? * The current capital structure and payout policies for Blaine’s Kitchenware Inc in our opinion is not the most appropriate. The firm’s structure is invested primarily in equity‚ for the
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Financial Management Literature Review on Capital Structure Date: 7\12\2012 Name: Tudor Gheorghiu Student Id: 12254888 Introduction 3 Theories on Capital Structure 3 Modigliani and Miller theory on capital structure 3 Other theories relating to the firm`s capital structure 4 Trade-off theory 4 Pecking order theory 5 Agency theory 6 Choosing between theories 7 Empirical evidence 7 Developed countries: 7 Emerging markets: 9 Capital structure of privatised firms 10 Factors
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