dividend reduces stock price‚ thereby reducing MVE as well. OCF can also use debt for equity swap thereby increasing leverage very fast. A key feature of recapitalization is also that the target company may issue more stock to its management there by giving them more control after recapitalization. Analysis of the Issue Leveraged recapitalization is the easiest way to change the capital structure of the company if the company can ensure the interest payments of the debts. Although value flows from
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Course: Corporate Finance Faculty: Prof. Pramod Yadav Submitted by: Jeet K Bhatt Roll No: 14 Assignment – FMC Corp. 1. What were the motivations for FMC corp. to go for recapitalization? a) To eliminate a takeover attempt: The stock was attractively valued and the company had quite a lot of cash ($403 million in 1986) in its hands. It made the company attractive to hostile takeovers. b) To give FMC employees a greater stake in the company: Company showed strong cash on its balance sheet
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FIN 5204 MANAGING CORPORATE CAPITAL INVESTMENT AND CAPITAL STRUCTURE FALL 2007 DEBT POLICY AT UST INC. 1. WHAT ARE THE PRIMARY BUSINESS RISKS ASSOCIATED WITH UST INC.? WHAT ARE THE ATTRIBUTES OF UST INC.? EVALUATE FROM THE VIEWPOINT OF THE BONDHOLDER. Over the years‚ UST has been a dominant producer in the tobacco industry‚ specifically the moist tobacco industry. Even though the past strategy with UST has entailed raising the prices of its products on a regular basis‚ the company still shows
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decline of interest in baseball fell. While this interest was down‚ Chicago Cubs owner Philip K. Wrigley took noticed and wanted to make a change. He feared that President Franklin D. Roosevelt was going to call off the Major League Baseball season until the war was finished. Wrigley wanted to give Americans something that the people could sit down and enjoy while we were still at war. Philip K. Wrigley then came up with the idea of an all-women’s fast pitch league after taking notice of the popularity
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Debt Policy at UST Inc. Name: Siqi Han Student ID: 104116968 Professor: Yunbi An 1. Frame the issue. Briefly describe that UST is planning to reverse a long-standing conservative financial policy. In the 1990s‚ UST is a major manufacturer of moist smokeless tobacco‚ controlling 77 percent of the market. Smokeless tobacco products both snuff (dry and wet) and chewing tobacco (loose leaf‚ plug and twist / volume) categories
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Contemporary Issues GROUP ASSIGNMENT 0BU(ACCOUNTING AND FINANCE) Leah Mpondela 609-6340-02 Fadzai Gambiza 609-6406-02 Takundwa Muzenda 609-6452-02 Mariam Nantumbwe 210052-01091-010 Question 1 (Group Question) I. It is very evident that one of the main responsibilities that the Hershey Trust Board views their responsibility to be is to the Milton Hershey School. In 1918‚ Milton Hershey endowed the trust board. The objective of this endowment was to have full support
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Case Page 4. 3) Interco had retained Wasserstein Perella pursuant to a unique compensation contract that offered a substantial contingency fee of $3.7 million payable to Wasserstein Perella once City Capital rescinded their offer and only if a recapitalization was completed. Wasserstein Perella would receive $1.8 million for its services with or without this contingency fee. See George Anders and Francine Schwadel‚ "Wall Streeters Helped Interco Defeat Raiders But at a Heavy Price‚" The Wall Street
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77% of the smokeless tobacco market and also has very strong brand recognition. In terms of the bondholders‚ UST has a historically high dividend payout rate. There are a few reasons as to why UST is considering a leveraged recapitalization. If the leveraged recapitalization is implemented‚ the value of the company would increase because of the interest tax shield of $380 million. The tax shield will increase the free cash flows of the company‚ supplying UST with more capital to invest in new product
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years due to price challenge from smaller companies and has been experiencing slow growth rates due to lack of innovation in recent years. The investors had concerns regarding the future of the company and hence‚ the board has decided to take up recapitalization of capital structure. UST Inc. is the dominant producer of moist smokeless tobacco‚ or moist snuff‚ controlling approximately 77% of the market. UST Inc. primarily has the moist smokeless products as its premium products. It also has a secondary
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1. What are the primary business risks associated with UST Inc.? What are the attributes of UST Inc.? Evaluate from the viewpoint of credit analyst or bond holder. UST Inc. is a smokeless tobacco company with a long tradition and a recognizable brand name. A strong brand name can have lots of associations with high quality‚ revenues‚ soundness‚ growth‚ etc. But‚ this is one of the characteristics that can be like two edged sward. On one side‚ company with long tradition is expected to
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