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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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The company has been earning less profits and hence wtudy is of the opinion of distributing the profits to shareholders instead of retaining it for further investments. Debt being a cheap source of finance and given the industry standards confirming the availability of the debt as well as the conformity by the casee in subscribing to the debt capital, it seems wise to have a levered capital structure instead of having a completely unlevered one as it would have affected the cost of capital of the company.

Net worth in Product details Share this page: Please find below the full details of the product you clicked a link to view. Order a custom essay Print this page Search again Word count: How would such a buyback affect Blaine? Cost of capital when the company is unlevered Ke Interest 0 Earnings Before Tax 77, 74, Less: This page has approximately words.

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them. Although atudy will involve the company raising a significant debt, this will also give them complete control to the promoters. According to their current situation we do not think their current capital structure and payout policies are appropriate. Finance, Accounting and Control.


Blaine Kitchenware Inc Exhibits Stephanie Zepeda | Stephanie Zepeda –

Register Submit to us Case writing resources Case writing scholarships How to submit your case Online case submission Why submit your case to us? The Case Centre is dedicated to advancing the case method worldwide, sharing knowledge, wisdom and experience cawe inspire and transform business education across the globe.

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

The payout ratio of the iitchenware has been increasingly increasing for the past three years. The Case Centre is a not-for-profit company limited by guarantee, registered in England Baine and entered in the Register of Charities No Why or why not? 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.

We have not been given the seperate data for equity share capital and Retained Earnings. Our work is high quality, plagiarism-free and delivered on time. Essay UK – http: About this resource This Business essay was submitted to us by a student in order to help you with your studies.

Another scenario is to completely buy-back the market float. Although investors take dividend as an indicator for a company kitchewnare succeed, they also expect dividend will be paid continuously at either stable or growing rate.


Since they kihchenware totally equity financed, there is no tax shield. As a non blxine member, the stock repurchase will make me more skeptical because the shares owned by the family is rising exponentially and hence making it more dominant.

Essay: Blaine’s Kitchenware – Essay UK Free Essay Database

There is a big question facing Blaine and that is why would their existing shareholders want to sell their equity back to the company?

Registered Data Controller No: Moreover, the ownership percentage srudy family has also increased and hence resulting in the more dominant position in the company. Access this item You must be logged in to access preview copies. Joel Heilprin ; Timothy A Luehrman. View our pricing guide or login to see prices.

Acquirers could pay way less than they originally expect to buy out the firm. The management should use the available cash and invest in attractive investments.

This shows that the company has been keen on less retention of money to further invest. Teaching note supplement sgudy. Buyback of the shares using the surplus cash and issuing debentures is beneficial for the company as it will give some degree blaind leverage to the company. Would you be in favor of it as a non-family shareholder?