Statement of the Problem: The William Wrigley Company is the world’s largest manufacturer and distributor of chewing gum. Over the preceding two years‚ revenues had grown at an annual compound rate of 10% and earnings grew 9%‚ these increases are a direct result of the introduction of new products and foreign expansion. As illustrated in the graphical diagrams in Exhibit 4 (appendix)‚ the company’s stock price had significantly outperformed the S&P 500 Composite Index‚ and performed slightly ahead
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INTRODUCTION * Wrigley has a one sided capital structure * Their interest rates has been at their lowest in 50 years * However‚ they have the leading market share in a stale low technology business * Blanka Dobrynin‚ the managing partner of Aurora Borealis LLC (a company who used a hedge fund to invest in companies who are in distress‚ merger arbitrage‚ change-of-control transactions‚ and recapitalization) wanted to investigate a potential investment of $3B in Wrigley * Wrigley being an
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The Wm. Wrigley Jr. Company: capital structure‚ valuation‚ and cost of capital Teaching Note Synopsis In June 2002‚ a managing director of an active-investor hedge fund was considering the possible gains from increasing the debt capitalization of the Wm. Wrigley Jr. Company. Wrigley had been conservatively financed and at the date of the case‚ carried no debt. The tasks for the student are to: Estimate the potential change in value from relevering Wrigley using adjusted present value analysis
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the use of debt financing. Upon closer inspection‚ I have noticed that your company uses no debt at all. As an experienced hedge fund manager‚ I am concerned that your management is missing valuable opportunities by excluding debt from your capital structure. My partner‚ Susan Chandler‚ and I have done extensive research on how undergoing a capital reconstruction process can benefit you in the long run. If your company decides to recapitalize‚ there are a few ways in which the debt can be used in
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WACC before recapitalization Wrigley’s prerecapitalization WACC is 10.9%. The cost of equity assumes a risk-free rate of 5.65% for 20-year U.S. Treasuries (case Exhibit 7)‚ a risk premium is assumed 7% (or 5%)‚ and uses Wrigley’s current beta of 0.75 (case Exhibit 5). 4. WACC after recapitalization The increase in leverage will affect Wrigley’s WACC in at least three ways: 1. Cost of debt: Wrigley’s debt rating will change from AAA (consistent with no debt) to a BB/B rating reflecting
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International Business – Coaching – Spreadsheet and Databases International Business offers a versatile selection of professions after graduation. As a result‚ I chose to focus on business leadership coaching‚ just like at the beginning of this semester. As an important note my parents own a coaching company‚ BoMentis‚ and my dream is to either take over it one day or at least work with them. Based on my research and personal experience‚ coaching has spread increasingly all throughout the world
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The aim of this experiment was to determine the effect of music and age on STM (WM). The results of the experiment were confirming the hypothesis to some extent. The hypothesis was that the older the subject conducting the experiment is‚ the higher the cognitive performance‚ which will result in a higher level in completing the task. Also the subjects will be distracted when the music is played. However‚ some of the results did not match the hypothesis; such as Group2 (Year 9 Newman) that completed
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A Brief History of Spreadsheets by D. J. Power Editor‚ DSSResources.COM Spreadsheets have been used by accountants for hundreds of years. Computerized or electronic spreadsheets are of much more recent origin. Information Systems oral history and some published newspaper and magazine stories celebrate Dan Bricklin as the "father" of the electronic spreadsheet. In 1978‚ Harvard Business School student‚ Daniel Bricklin‚ came up with the idea for an interactive visible calculator (see email from
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Spreadsheet Exercises Using Excel Learning Objective: These exercises are designed to familiarize you with a spreadsheet application software called MS Excel. After the completion of the lab‚ you should be able to: 1. work with MS Excel or other spreadsheet programs 2. use functions and formulas in a spreadsheet application software for calculation 3. explain what functions and formulas are‚ how they work‚ and the difference between them Formulas Well‚ a formula is a simple calculation
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2014 Etec 100 Dr. Wilson Chapter 10 Chapter ten introduces the topic of spread other cells. A spreadsheet consists of a table of cells arranged into rows and columns and referred to by the X and Y locations. X locations‚ the columns‚ are nord sheets‚ A spreadsheet is an interactive computer application program for organization‚ analysis and storage of data in tabular form. Spreadsheets devel computerized oped as simulations of paper accounting worksheets. The program operates on data represented as cells of an array
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