Blaine Kitchenware Case Study Answers 1. ABOUT THE COMPANY Blain Kitchenware, Inc. (BKI), founded in , is a mid-sized producer of. View Notes – Blaine Kitchenware Case from FIN at DePaul University. Blaine Kitchenware Questions: 1) Do you believe that Blaines current capital structure. ABOUT THE COMPANY. Blain Kitchenware, Inc. (BKI), founded in , is a mid- sized producer of small appliances for residential kitchens. BKI has an.

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A surplus of cash lowers the return on equity and increases the cost of capital; also large amount of cash may offer incentives to acquirer to and also decrease the enterprise value of Blaine. My account New to The Case Centre?

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Attention is also given to the value of interest tax shields. This shows that the company has bblaine keen on less retention of money to further invest. Each of us is qualified to a high level in our area of expertise, and we can write you a fully researched, fully referenced complete bpaine answer to your essay question. About this item Settings Related products Abstract A diversified mid-sized manufacturer of kitchen tools contemplates a stock repurchase in response to an unsolicited takeover.

Would you be in favor of it as a non-family shareholder? Medicine essays Miscellaneous essays Psychology essays Religious studies essays Science essays Sociology essays Essays kitchenwre.

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Acquirers could pay way less than they originally expect to buy out the firm. Their management will have increased stakes, this will reduce their chance of being acquired and this will provide more dividends to their remaining shareholders. Essay UK – http: Another scenario is to completely buy-back the market float.


Since they are totally equity financed, there is no tax shield. They also have to consider of the effect of the repurchase on various factors like the risks involved in raising a debt especially when they are large, very conservative and debt free.

Dividend payout ratio 0. We are completely closed on Tuesday 1st January. Since Blaine Kitchenware is a public company with large portion of its shares held by their family members, they have a financial surplus, which decreases the efficiency of its leverage. Tax ID No All fields Reference no. Register Submit to us Case writing resources Case writing scholarships How to submit your case Online case submission Why submit your case to us?

In other words, Blaine does not fully utilize its funds.

Keep up to date with email updates Pricing Shipping options Terms of business What’s available from us? Blaine has an unlevered capital structure currently i. The company has been earning less profits and hence it is of the opinion of distributing the profits to shareholders instead of retaining it for further investments. Although this will involve acse company raising a significant debt, this will also give them complete control to the promoters.

There are UK writers just like me on hand, waiting to help you. If this essay isn’t quite what you’re looking for, why not order your own custom Business essay, dissertation or piece of coursework that answers your exact question? We have not been given the seperate data for equity blaie capital and Retained Earnings. Go to advanced search. Following is the operating results for the year when the capital structure is levered and unlevered.


Blaine is currently over-liquid and under-levered and their shareholders are suffering from the effects.

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How would such xase buyback affect Blaine? Buyback of the shares using the surplus cash and issuing debentures is beneficial for the company as kitchenwaer will give some degree of leverage to the company. Access this item You must be logged in to access preview copies.

Seeing the industry debt equity ratio, the company has kept itself unlevered and this was a bit costly as the cost of debenture is fast cheaper if we compare it with the cost of equity.

However, concluding whether an unlevered or a levered capital structure is appropriate for a company largely depends on the industry debt equity ratio i. You can change your cookie settings at any time but parts of our site will not function correctly without them. The Case Centre is dedicated to advancing the case method worldwide, sharing knowledge, wisdom and experience to inspire and transform business education across the globe.

View our pricing guide or login to see prices. About this resource This Kitchenwafe essay was submitted to us by a student in order to help you with your xase. Teaching note supplement software.