Blaine Kitchenware Assignment

Blaine Kitchenw atomic number 18, Inc. Optimal Capital Structure For this case information you will take on the role of the investment banker introduced at the first of the case study. A week following your first meeting with Mr. Dubinski, he has called to request your assistance with the summary of a stock repurchase. He has usable experience, but little financial management experience (he does not pretend any debt on his balance sheet ). As a result, he needs your help convincing his board of directors that the stock repurchase is a good idea. The board is more financially conservative than Mr.Dubinski. Mr. Dubinski wants you to evaluate a scenario where Blaine Kitchenwargon, Inc. (BKI) will repurchase 14 million shares at $18. 50 per share. To do so, BKI will borrow $50 million at an interest array of 6. 75% (this is your stake in the deal because your bank will pass on the loan). Consider the following questions that are likely to be raised regarding the analysis What eff ect does the proposal have on the balance sheet? How is run performance squeeze? How are get aheadings per share and ROE impacted? How is leverage affected? How is interest coverage affected?What is the expected speak to of financial distress? How is the cost of capital impacted? What happens to the family control of the melody? For this assignment you should write a memo to the board of directors. N singleof these directors are hygienic versedin finance and all are incredulous of using debt. Space dedicated to explaining leverage concepts in layperson terms and the calculations involved will prove to be very relevant and well take upd. Board members are also looking for advanced analysis with licence of critical thinking, particularly as it regards optimal capital structure.They always instruct well written memos that make appropriate use of correct grammar and spelling. They are also very busy running their own corporations, so memos written in a concise manner are bett er received. However, as stated inKeys to Successful Case Studies Write-up Tips, if you have just one page of analysis, I will not read it. You will earn a zero. While your memo should be concise, it should also contain a detailed appendix of your calculations. The course website will only allow you to require one document. Thus, you will need to insert your Excel tables as objects in your word document before uploading your write-up to the course website. I must receive both a hardcopy and electronic version submitted through the course website by 200pm on the due date. Otherwise, the write-up is considered late and will not be graded. Extra Credit OpportunityI will grade the assignments. so I will go back through the assignments and award an supererogatory 5 points (essentially half a letter grade) to any memo that powerful referencesat least two relevantHarvard Business Reviewarticles and/or Wall Street Journal articles. See the attachment for the gradingrubric.