Corporate-Finance-Blaine-Kitchenware-assignment-help-
You have been hired as a consultant to Victor Dubinski, the CEO of Blaine Kitchenware. You are charged with putting together a written report with supporting numerical analysis that addresses the following items:
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Is the current capital structure and payout policy for Blaine optimal? Explain and justify your conclusion. Use numbers whenever possible.
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Should Blaine recommend a large share repurchase to the Board of Directors? What are the advantages and disadvantages of this action? Again, explain and justify your conclusions. Use numbers whenever possible.
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Consider two specific share repurchase proposals:
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First Proposal
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Blaine will issue $50 million in new debt at an interest rate of 6.75%
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Blaine will use $209 million of cash from its balance sheet
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Blaine will use these two sources of cash to repurchase 14 million shares at $18.50/share.
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Supporting documentation is attached.