Blaine Kitchenware Assignment

Blaine Kitchenw are, Inc. Optimal Capital Structure For this case study you volition canvas on the role of the investment banker introduced at the beginning of the case study. A week followers your first meeting with Mr. Dubinski, he has called to request your economic aid with the analysis of a stock repurchase. He has operational experience, but infinitesimal financial management experience (he does not have any debt on his balance sheet ). As a result, he needs your attend convincing his bill of fare 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 Kitchenware, Inc. (BKI) allow for repurchase 14 million shares at $18. 50 per share. To do so, BKI exit take $50 million at an interest rate of 6. 75% (this is your postal service in the deal because your bank will make the loan). Consider the following questions that are likely to be raised regarding the analysis What effect does the plan have on the balance sheet? How is operating performance wedge? How are earnings per share and ROE impacted? How is leverage moved(p)? How is interest coverage affected?What is the expected cost of financial bother? How is the cost of capital impacted? What happens to the family control of the business? For this assignment you should save a memo to the board of directors. Noneof these directors arewell versifyin finance and all are skeptical of using debt. berth dedicated to explaining leverage concepts in layperson terms and the calculations involved will prove to be very(prenominal) relevant and well received. Board members are also looking for advanced analysis with evidence of critical thinking, especially as it regards optimal capital structure.They always appreciate well create verbally memos that make appropriate use of correct grammar and spelling. They are also very busy running their own corporations, so memos written in a co ncise manner are better 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. age your memo should be concise, it should also contain a detailed addition of your calculations. The course website will only allow you to submit one scroll. 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 identification OpportunityI will grade the assignments. Then I will go back through the assignments and award an additional 5 points (essentially half(prenominal) a letter grade) to any memo that properly referencesat least(prenominal) two relevantHarvard Business Reviewarticles and/or Wall roadway Journal articles. See t he attachment for the gradingrubric.