In contrast to it, the debt ratio would be increased by reduction on the equity side. Therefore, the company is still in profit so it should consider a repurchase strategy in order to improve the operations efficiently 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.
Therefore, the company should accept the proposed strategy in order to satisfy its shareholders and their future considerations. Please place the order on the website to order your own originally done case solution.
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.
Therefore, the overall return on equity, earnings per share would decrease over time.
On the other side, the net earnings would also increase by the addition of 50 million of interest paid debt.
Thus, with the concept, it is concluded that all the stockholders and controlling family should consider the strategy to benefit for the long-term.
The repurchase would also allow increasing the earnings per share as well as dividend payouts. 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.
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.
The inclusion of debt would decrease the tax obligations and improve the earnings quality. Dividend payments It clearly shows that if the earnings per share would tend to increase over time, then the dividend payments would also increase.
This is just a sample partial case solution. Thus, the dividend payout ratio would grow by a decrease in the outstanding shares. Therefore, it shows that the company disclosed high earnings in the recent year.
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.Teaching Note | | Blaine Kitchenware, Inc.: Capital Structure (Brief Case).
Blaine Kitchenware Case Study Blaine Kitchenware has occupied the industry for over 80 years and continues to gain control in the market it occupies. As the CEO of the company, Mr. Dubinski is faced with the difficult decision of 5/5(19).
Blaine Kitchenware Questions: 1) Do you believe that Blaine’s current capital structure and payout policies are appropriate?
Why or why not? Blaine Kitchenware is a medium-sized company and it captures 10% market share in US. The company has a reputation of high quality with lower price than best-known brands%().
View Finance case - blaine kitchenware Ans from FIN at Manchester University. Discussion questions Do you believe Blaines current capital structure and payout policies are appropriate?
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Wrigley Jr. Company: Capital Structure. 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.Download