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  • 34 Suggested Questions For The WM Wrigley JR Company

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    Stephanie Regina
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    Blanka Dobrynin is hoping to accomplish her goals through an active-investor strategy at The Wm. Wrigley Jr. Company. Issuing $3 billion in new debt to either pay a dividend or repurchase shares would decrease Wrigley's outstanding shares and book value of equity, increase the price per share and earnings per share but weaken debt coverage ratios and financial flexibility. It would not affect voting control by the Wrigley family. The recapitalization would likely increase Wrigley's weighted-average cost of capital.

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    Blanka Dobrynin is hoping to accomplish her goals through an active-investor strategy at The Wm. Wrigley Jr. Company. Issuing $3 billion in new debt to either pay a dividend or repurchase shares would decrease Wrigley's outstanding shares and book value of equity, increase the price per share and earnings per share but weaken debt coverage ratios and financial flexibility. It would not affect voting control by the Wrigley family. The recapitalization would likely increase Wrigley's weighted-average cost of capital.

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    © All Rights Reserved
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    57 views1 page

    34 Suggested Questions For The WM Wrigley JR Company

    Uploaded by

    Stephanie Regina
    Blanka Dobrynin is hoping to accomplish her goals through an active-investor strategy at The Wm. Wrigley Jr. Company. Issuing $3 billion in new debt to either pay a dividend or repurchase shares would decrease Wrigley's outstanding shares and book value of equity, increase the price per share and earnings per share but weaken debt coverage ratios and financial flexibility. It would not affect voting control by the Wrigley family. The recapitalization would likely increase Wrigley's weighted-average cost of capital.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
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    Suggested Questions for The Wm. Wrigley Jr.

    Company

    1. In the abstract, what is Blanka Dobrynin hoping to accomplish through her active-
    investor strategy?
    2. What will be the effects of issuing $3 billion of new debt and using the proceeds either to
    pay a dividend or to repurchase shares on:
    a. Wrigley’s outstanding shares?
    b. Wrigley’s book value of equity?
    c. The price per share of Wrigley stock?
    d. Earnings per share?
    e. Debt interest coverage ratios and financial flexibility?
    f. Voting control by the Wrigley family?
    3. What is Wrigley’s current (prerecapitalization) weighted-average cost of capital
    (WACC)?
    4. 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 to repurchase shares?
    5. Should Blanka Dobrynin try to convince Wrigley’s directors to undertake the
    recapitalization?

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