Why or why not? Blaine has an unlevered capital structure currently i. However, concluding whether an unlevered or a levered capital structure is appropriate for a company largely depends on the industry debt equity ratio i. Debt being a cheap source of finance and given the industry standards confirming the availability of the debt as well as the conformity by the rivals in subscribing to the debt capital, it seems wise to have a levered capital structure instead of having a completely unlevered one as it would have affected the cost of capital of the company.
Therefore, it shows that the company disclosed high earnings in the recent year. Buyback affect Blaine If Blaine would repurchase 14 million of shares, then it can be said that the cash balance Liquidity would decline in the balance sheet as well as the impact would show on the equity portion similar to cash changes.
On the other side, the net earnings would also increase by the addition of 50 million of interest paid debt. Therefore, the overall return on equity, earnings per share would decrease over time. In contrast to it, the debt ratio would be increased by reduction on the equity side.
So, it shows that the overall financial results would be different from that of the actual scenario.
Perspective of controlling family to repurchase shares As far as the net earnings would tend to decline, the overall returns of the controlling family would also decrease over time. Thus, it is an indication of conservative accounting, where the company would incur additional expenses on the current period in order to increase the future earnings.
Perspective of other stockholders for repurchase strategy Excluding the interest of controlling family, other stockholders should agree with the proposed strategy because it would allowincreasing the earnings per share by a reduction in the outstanding shares as well as an increase in the dividends.
Thus, with the concept, it is concluded that all the stockholders and controlling family should consider the strategy to benefit for the long-term.
Dividend payments It clearly shows that if the earnings per share would tend to increase over time, then the dividend payments would also increase. Thus, the dividend payout ratio would grow by a decrease in the outstanding shares.
Therefore, the company should accept the proposed strategy in order to satisfy its shareholders and their future considerations. Recommendation for repurchase From the analysis, it is recommended that Blaine should consider a large portion of share repurchase because it would allow managing the capital structure and financial policies of the company by balancing its debt and equity.
The inclusion of debt would decrease the tax obligations and improve the earnings quality. The repurchase would also allow increasing the earnings per share as well as dividend payouts.
Therefore, the company is still in profit so it should consider a repurchase strategy in order to improve the operations efficiently This is just a sample partial case solution.
Please place the order on the website to order your own originally done case solution.Blaine Kitchenware, Inc. Case Study Solution Review of capital structure and payout policies. From the following situation, it seems that the Blaine’s didn’t disclose the proper implementation of the definedpolicies because of the significant difference between debt and equity yunusemremert.com://yunusemremert.com Blaine Kitchenware, Inc.: Capital Structure Case Study Help, Case Study Solution & Analysis & Blaine Kitchenware, Inc.: Capital Structure Case Solution Review of capital structure and payout policies From the following situation, it seems that the B.
This free Business essay on Essay: Blaine's Kitchenware is perfect for Business students to use as an example. Capital structure: Blaine has an unlevered capital structure currently i.e., it is debt free and the entire capitalization is of equity only.
XQL Corp. and Bunkerhill, Inc. However, EasyLiving Systems and Home & Hearth Design yunusemremert.com › Home › Free essays › Business essays. The Pearl Brewing Company (also known as the Pearl Brewery or just Pearl) was an American brewery, established in in Downtown San Antonio, Texas, yunusemremert.com , Pearl's parent company purchased the Pabst Brewing Company and assumed the Pabst name.
In , the Pabst Brewing Company began transferring its production to Miller Brewing, on a contract basis, and closing all of its breweries. rP os t OCTOBER 8, TIMOTHY LUEHRMAN JOEL HEILPRIN op yo Blaine Kitchenware, Inc.: Capital Structure On April 27, , Victor Dubinski, CEO of Blaine Kitchenware, Inc.
(BKI), sat in his office reflecting on a meeting he had had with an investment banker earlier in the yunusemremert.com://yunusemremert.com Blaine Kitchenware, Inc.: Capital Structure (Brief Case), Spanish Version Financial management, firm value, and capital structure Bed Bath & Beyond: The Capital Structure Decision INTERNATIONAL FINANCE CAPITAL STRUCTURE Bed Bath & Beyond: Capital Structure and their Manitance The Wm.
Wrigley Jr. Company: Capital Structure .