Statement of the Problem: The William Wrigley Company is the world’s largest manufacturer and distributor of chewing gum. Over the preceding two years‚ revenues had grown at an annual compound rate of 10% and earnings grew 9%‚ these increases are a direct result of the introduction of new products and foreign expansion. As illustrated in the graphical diagrams in Exhibit 4 (appendix)‚ the company’s stock price had significantly outperformed the S&P 500 Composite Index‚ and performed slightly ahead
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INTRODUCTION * Wrigley has a one sided capital structure * Their interest rates has been at their lowest in 50 years * However‚ they have the leading market share in a stale low technology business * Blanka Dobrynin‚ the managing partner of Aurora Borealis LLC (a company who used a hedge fund to invest in companies who are in distress‚ merger arbitrage‚ change-of-control transactions‚ and recapitalization) wanted to investigate a potential investment of $3B in Wrigley * Wrigley being an
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a managing director of Aurora Borealis hedge fund‚ considers the possible gains from increasing the debt capitalization of The Wm. Wrigley Jr. Company. Blanka suggests Wrigley raise the amount of $3 billion in debt of the capitalization while Wrigley has been conservatively financed and remained no debt at the end of 2001. This report is aiming to analyze whether Wrigley should use $3 billion debt recapitalization to either pay dividends or to repurchase shares. 2.0 Current Capital Structure
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Introduction The William Wrigley Jr. Company is the largest manufacturer and distributor of chewing gum‚ with a well consolidated market position. Due to new products and foreign expansion‚ its previous revenues have grown at an annual rate of 10% and its stock price regularly outperforms the S&P 500 as well the industry index. It is a conservatively financed firm with total assets of $1.76 billion and zero debt as of 2001. The purpose of this case study revolves around how should they use a $3
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or continue with a share repurchase could positively affect many aspects of your company. This capital restructure could improve your firm’s share value‚ cost of capital‚ debt coverage‚ earnings per share and voting control. Please refer to our analysis below and in the attached excel spreadsheet for consideration. Using Debt to Maintain Dividend In order to maximize shareholder value‚ one option to consider is issuing debt to pay out an equivalent dividend. It is important to note that increasing
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Both Louise Tilley (Tilly‚ et al.‚ 1992) and Wrigley (Wrigley‚ 1978) argued that this effect of mass child foundling and abandonment was a form of “social distribution of children in Medieval Europe” where houses with extra children distributed them to those with deficiency in an effort to balance the economics of the time ‚ this is however from an economical modelling and has nothing to do with family decision making. Boswell (Boswell‚ 1988) also asserts that children were redistributed in the
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From Wrigley Field to Yankee Stadium A mighty and triumphant roar radiates from the throats of the thousands upon thousands of people packed into the stands like sardines. Tears of joy stream down the faces of grown men as the team they have loved since they could first walk has just won the World Series. The sport of baseball has grown to become the national pastime of the United States since Abner Doubleday first invented it in 1839. From 1839 to the present‚ many things have changed about the
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WEIGHTED AVERAGE OF COST OF CAPITAL (WACC) ‚EPS . Chandler knew that the maximum value of the firm was achieved when the weighted average cost of capital was minimized. Thus she intended to estimate what the cost of equity and the wacc might be if wrigley pursued this capital structure change. The projected cost of debt would depend on her assessement of wrigley’s debt rating after recapitalization and on current capital market rates. WACC before recapitalization Wrigley’s pre recapitalization
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SWOT analysis From Wikipedia‚ the free encyclopedia Jump to: navigation‚ search A SWOT Analysis is a strategic planning tool used to evaluate the Strengths‚ Weaknesses‚ Opportunities‚ and Threats involved in a project or in a business venture or in any other situation of an organization or individual requiring a decision in pursuit of an objective. It involves monitoring the marketing environment internal and external to the organization or individual. The technique is credited to Albert Humphrey
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Shlensky vs. Wrigley The case is about a stockholder named Shlensky who is suing the board of directors of Wrigley Field on the grounds of failure to install lights at the stadium. This is a claim of mismanagement and negligence by the directors. At the time of the case‚ The Chicago Cubs were the only major league team without lights on their stadium. Mr. Wrigley‚ the principal owner of the team‚ refused to add lights onto the stadium because he felt that‚ "baseball is a daytime sport and it would
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