Essays on Recapitalization

The firm does not have debt. Therefore, the firm value is the outstanding number of shares multiplied by market share price. Value of Wrigley’s = 232.44 million *56.37 = 13.103 billion dollars

We assume that Wrigley uses the debt that has been raised to pay dividends to shareholders

Value of Wrigley’s = Market value of Equity + Debt Value Value of Wrigley’s = 13.103 billion + 3 billion = 16.103 billion dollars The proposed coupon rate is 13 percent. After the re-capitalization, the total debt ratio will be 73 percent. Therefore, the Bond will be rated between grade BB and grade B. The effective debt yield for a grade B debt security is 14.67 percent while that if grade ...

The primary issue in this case is related to pending litigation of the company and increasing competition in the tobacco industry that is likely to erode the market share of the company.

Why is UST Inc. considering a leveraged recapitalization after such a long history of conservative debt policy?

UST is considering a leverage capitalization in order to benefit from the tax shield associated with the debt financing. The increase in value along with existing enterprise value will be distributed amongst lower number of shareholders. Moreover, considering the past performance of UST, the company has a high cash generative capacity of the company’s business. Evaluate the business risks of UST from the viewpoint of a ...

In small economies such as Ireland, the traded sector is normally the leading sector for any economic development. In any bid to resurrect the economy from the depression which we have recently experienced, all reforms are aimed to surge the private sector so that the population can be able sustain itself.

The government of Ireland in their efforts to resurrect the economy has been working with the IMF and the EU in making the progress on the European policy reforms including the banking union which is very critical to the European and global confidence. The government negotiated with the ...