1. In the abstract, what is Blanka Dobrynin hoping to accomplish through her active-investor strategy? Blanka Dobrynin is an activist investor that focuses on distressed companies, merger arbitrage, change of control transactions and recapitalizations. For recapitalizations she looks for inefficiencies in companies’ capital structure and gains returns through restructuring them with more efficient methods. She seeks firms that are stable and that have relatively low risk and little to no debt. She then uses the benefits of leverage, which provides more financial flexibility, a tax shield, and in some cases a higher market capitalization. 2. What is your estimate on Wrigley’s WACC now (case content; also see Exhibit 5 and 7)? If Wrigley issues
$3 billion in new debt and using the proceeds to repurchase shares, would that affect its WACC? To calculate the new WACC we have to adjust for the changes due to the new debt, using the 10-year treasury bond rate of 4.86% as the risk free, the market risk premium of 7%, the cost of equity 11.7%, a 40% tax rate, cost of debt at 13%, a new levered beta of .87, and weight of 80% equity and 20% debt. The new WACC after the new debt is acquired would be 10.93%, slightly higher than the original WACC. Yes, because it would change market capitalization and therefore change beta and cost of equity. 3. Should Blanka Dobrynin pursue the recapitalization proposal with Wrigley’s directors? Yes, there are many benefits that will be gained by Wrigley and therefore higher returns for Dobrynin. The company would enjoy benefits with a rise in share prices, increasing ROE, tax shields, and a higher total firm value. Wrigley’s directors would also be favored due to increased voting ability. Historically her performance with this method has historically yielded high returns, Wrigley’s is also a large stable company that has little to no risk and Wrigley’s could largely benefit from the effects of leverage in many aspects.
The purpose of this paper is to provide a summary of the article called “Can We Keep Our Promises?” by Robert D. Arnott, and to help better understand the three key risks facing each investor.
A sports writer investigated the scandal and later wrote a famous article called “Is Big League Baseball Being Run for Gamblers WIth Players in the Deal.” The White Sox owner quickly avoided the rumors by saying that ”I believe that my boys fought the battles of the recent World Series on the level.” He wanted to avoid people knowing that he had been tipped off about the scam for the World Series.
My conclusion is that the protagonist should buy more stock of Costco Wholesale Corporation as she concluded the company is growing at manageable rate without relying on debt or equity. They are with high sales or profit, low labor costs, and consistent growth. Costco seems to be a low risk stock that is performing well with long term stability for more
The company, General Mills, for which I was assigned, proved to be a worthwhile investment researching since it contains a large portion of the market share of its “niche,” that being breakfast cereals and the like. In conducting the research necessary to find out if a potential investor might strike interest upon General Mills, we find out a myriad of things. By drawing our attention towards the spreadsheet, which contains the bits of information we need to infer conclusions, we can see the patterns that develop over a 5 or 10 year period involving such things as: stock price, EPS, ROI, and many others. The following will give some insight into the history of General Mills among other things.
... Major League Baseball - By George Harvey - Rockland - Camden - Knox - Courier-Gazette - Camden Herald."Unfortunately, Money Still Flows for PED Users in Major League Baseball - By George Harvey - Rockland - Camden - Knox - Courier-Gazette - Camden Herald. Village Soup, 2 Dec. 2013. Web. 17 Dec. 2013.
Bowman, E. H. & Singh, H. (1993) ‘Corporate Restructuring: Reconfiguring the Firm’, Strategic Management Journal, 14, pp. 5-14 Retrieved July 7, 2010 from JSTOR's Website.
Gaughan, P. A. (1996). Mergers, acquisitions, and corporate restructurings. New York: John Wiley & Sons.
The recent trend of selling stock but attaching limited voting rights is being followed by Canada Goose. Investors should, therefore, examine carefully the voting rights of the stocks retained by Bain in comparison to the voting rights of their stock purchase. It is under Bain Capital management that Canada Goose has racked up $278 million in debt and this position limits its growth prospects. The IPO funds raised have been earmarked to be used to pay this debt. While necessary, it is not a good start for a company that wants to
(Central time). Further, the matter is set for trial on January 7, 2019. If the case does not settle at the upcoming pretrial conference, there are four Lend Lease witnesses that must be deposed along with wage loss witnesses, family/damage witnesses and several treating physicians. The parties would then progress to expert witnesses. In the event Lend Lease settles the case and Midwest waives its liens, we expect Lend Lease will pursue its contribution claim against Cives. Therefore, we would need to depose Lend Lease’s witnesses and then proceed to expert discovery to prepare for trial starting on January 7,
... Rajaratnam hedge-fund Galleon Group. The group had over $1.5 billion dollars invested with many Sri Lankan companies (Ondaatjie, 2009). Once Rajaratnam was indicted many investors decided to pull their funds out of Galleon Group. This created chain reactions that led to all investors pulling their money from the hedge fund. Millions had to be removed from Sri Lanka to pay back its investors. This left many Sri Lankan companies with little cash on hand to continue operation and expansions.
The ACWL after four years – progress report by the Management Board. Oct 2005, .
On July 29, 2011, Martinrea acquired Honsel AG, a leading German supplier for aluminum auto components that was facing significant liquidity issues. Martinrea purchased 55% of the assets of the company, while Anchorage LLC, a private investment firm, acquired the remaining 45%. This transaction helps Martinrea with their aluminum market share, broadens segmented earnings,...
This was known to be the largest racial discrimination case that settled. They settled at $156 million; “The settlement also mandates that the company make sweeping changes, costing an additional $36 million, and grants broad monitoring powers to a panel of outsiders -- an unusual concession in employment discrimination cases” (Winter,
Bodie, Z., Kane, A., & Marcus, A. J. (2011). Investments. (9th ed.). New York, NY: McGraw-Hill/Irwin.
... sacrificed for growth which may lead to a takeover or selling of their shares.