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| Teaching Since: | May 2017 |
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MBA, PHD
Phoniex
Jul-2007 - Jun-2012
Corportae Manager
ChevronTexaco Corporation
Feb-2009 - Nov-2016
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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.
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.
Consider two specific share repurchase proposals:
First Proposal
Blaine will issue $50 million in new debt at an interest rate of 6.75%
Blaine will use $209 million of cash from its balance sheet
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.
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