The Wm. Wrigley, Jr. Company (Part 1)
In the first part of the tutorial, each group will present to the class a succinct and yet comprehensive discussion of the following issues relating to Wrigley. Students who do not belong to any group will be assigned to a group in this tutorial. Intra-group discussions will be facilitated in the second part of the tutorial.
Question #1: (J1, S1, PA1, PB1)
Looking at the data provided to you in the case, without doing a detailed analysis, do you agree with Blanka Dobrynin’s view that Wrigley is not efficiently financed? Why? Discuss clearly the methods you will use to help you to arrive at your decision.
Question #2: (J2, S2, PA2, PB2)
What could possibly be the benefits of having more debt for Wrigley? You must refer to the literature to support your answer.
Question #3: (J3, S3, PA3, PB3)
What could possibly be the costs of having more debt for Wrigley? You must refer to the literature to support your answer.
Question #4: : (J4, S1, PA4, PB4, PA5, PB5)
What would you expect to happen to Wrigley’s WACC if it issued $3 billion in debt and used the proceeds to pay a dividend or repurchases? You must refer to the literature to support your answer.
Discuss how each of you will contribute to the team work, and what mechanisms you have put in place to ensure progressive team effort. A reminder all group leaders are to keep evidence of group meetings and correspondence; these will be submitted with the final report.