...Blaine Kitchenware Inc. Case Analysis: Muhamad Fahad Sohail Table of Contents Blaine Kitchenware capital structure and payout policy 2 Advantages and Disadvantages of share repurchase move 2 New proposal by CEO TO repurchase stocks from the market and its analysis 3 Recommendation to the CEO as a family member and as an independent consultant 3 How does the proposal differ from paying a special dividend of $4.39 share instead? 4 Blaine Kitchenware capital structure and payout policy Blaine Kitchenware Inc.’s current capital structure is not efficient. The incentive for any public company and Board of Directors should be the increase the value of firm through projects, increased earnings per share value, and the lowering of costs. One way many firm’s effectively increase the value of the firm is to minimize the weighted average cost of capital. The weighted average cost of capital is the costs of a firm in the form of debt and equity. Since Blaine Kitchenware is a public company and issues shares, they have an established capital structure model. By taking on no debt, the value of the firm is unlevered and the firm does not gain the advantage of the interest tax shield. It is because Blaine Kitchenware Inc. has chosen to finance projects by the selling of shares and has not made use of debt issuance that the firm’s value is not fully maximized and the weighted average cost of capital is not minimized. If Blaine Kitchenware Inc. took on debt, the value of the...
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...Ahmad Mohammad Analysis of Blaine Kitchenware Inc. case Brief Background Blaine Kitchenware Inc., a mid-sized producer of branded small appliances primarily used in residential kitchens, has a very conservative practices regarding taking debt. It only took debt twice in its entire history. An investment banker prompted the idea of repurchasing some of the company’s stocks to the CEO Mr. Dubinki. The CEO is not sure whether the repurchase will benefit the company or not. Problems with Blain current capital structure The main problems that I have noticed in Blain’s capital structure are * Heavy reliance on equity. * Zero debt * Surplus of cash Even though there are not problems at all with the company’s profitability, those problems above does not allow the company to operate at the maximum efficiency. Zero debt does not allow the company to benefit from tax shield. The firm is has extremely conservative practices regarding financing and they have only took debt twice in its entire history. On the other hand, heavy reliance on equity reduces the ROE, making it significantly lower that those of other competitors. Regarding the payouts, the dividend payout ratio had a dramatic increase from 35% in 2004 to 52.9% in 2006, which raises questions about the sustainability of cash growth. At the same time the Earning Per Share ratio (EPS) from 1.29 to 0.91. this is because there is a huge amount of shares available compared to the company’s net income. Actually...
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...Robert H. Smith School of Business BUFN 740: Capital Markets Fall 2014 Tuesdays and Thursdays Aug 25, 2014--Oct 13, 2014, 1:00pm—2:50pm, VMH 1330 Instructor: Yajun Wang Office Hours: Tuesdays and Thursdays 5:00pm-6:00pm Office: VMH 4453 E-Mail: ywang22@rhsmith.umd.edu, Office Number: (301) 405-3412 Teaching Assistants: CP Sessions: Qi Xu, qi.xu@rhsmith.umd.edu (hold help sessions in CP, grade all homeworks and cases for session 0501, and grade hw #1,2,3 and case #1,2,3 for session 0502) DC Sessions: Julia Zhu yantong.zhu@rhsmith.umd.edu (hold help sessions in DC, grade all homeworks and cases for session DC C1, and grade hw #4, 5, 6,7 for session 0502) Help Sessions: Mondays: 7:30-8:30pm @VMH, Room: VMH 1505 Mondays: 5:00-6:00pm @DC, Room: C2 Course Description This course covers modern theories and techniques for investments and asset pricing. The main topics covered are: portfolio theory, pricing models, market efficiency, fixed income investment, forwards and futures, and options. Canvas: Course materials such as lecture notes, required homework assignments, worked solutions to problems, and other useful information will be available on the course web page at Canvas: https://myelms.umd.edu/ Course Materials The following textbook is required and will be used throughout the course: Investments, by Zvi Bodie, Alex Kane and Alan J. Marcus, 9th Edition, published by McGraw Hill. Henceforth this book will be referred to as BKM. We will cover three cases in this course. ...
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...Blaine Kitchenware Case Study Blaine Kitchenware has occupied the industry for over 80 years and continues to gain control in the market it occupies. As the CEO of the company, Mr. Dubinski is faced with the difficult decision of determining what is best for the family company. The following questions will address what decision is the optimal and why it is beneficial for BKI. Ans. 1) The main dilemma in the case is whether Blaine Kitchenware’s should choose to repurchase its own shares or not. If Blaine’s Kitchenware does repurchase its shares, they must consider whether to partially repurchase the market float or go for a complete buyback where Blaine’s family would become the owner of all the remaining shares. They also have to consider of the effect of the repurchase on various factors like the risks involved in raising a debt especially when they are large, very conservative and debt free. They should also consider things such their acquisition plans, their earnings per share and their dividend per share, ownership structure, capital structure and of course the reputation of the company in the market after the buyback. With this in mind we can consider a few situations and then decide what Blaine should do, keeping in mind the perspective of both the existing shareholders' as well as Blaine's family’s. Since no debt is being raised, if all the cash & cash securities plus the market securities are used for the buy-back, his family may like this option. Their management...
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...Introduction Victor Dubinski, CEO of Blaine Kitchenware, Inc. had recently been made aware that a group of private equity investors made inquiries about a possible acquisition of Blaine. Dubinski knew that the family had absolutely no interest in selling, but he was still perplexed about how the private equity group could unlock some inherent value within their company. They wanted to use the cash on Blaine’s balance sheet and new borrowings to purchase all of Blaine’s outstanding shares at a price higher than its current stock price. After some thinking, he began to think about how he could complete a repurchase decision himself and thus stave off an unsolicited takeover. Blaine Kitchenware is a mid-sized producer of branded small appliances primarily used in residential kitchens. It was originally founded in 1927 as the Blaine Apparatus Company and produced then-novel electric home appliances. By the year 2006, Blaine had achieved a 10% share of the total $2.3 billion U.S. market for small kitchen appliances. Recently Blaine began expanding into foreign markets. A majority of their revenue was generated from shipments to U.S. wholesalers and retailers, but 35% of their sales came from Canada, Europe, Central, and South America. By the end of 2006, Blaine’s balance sheet was the strongest in the industry. They were debt-free and held $231 million in cash and securities. More recently, the company’s largest uses of cash had been dividends paid out to their shareholders...
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...Blaine Kitchenware Inc. Take-Home Case Assignment BSAD 342 Prof. Vishwakarma Grady McQuillan Joe Mackay Mitch Chown Alessandro Galeone Discussion questions • Do you believe Blaine’s current capital structure and payout policies are appropriate? Why or why not? The current capital structure and payout policies for Blaine’s Kitchenware Inc in our opinion is not the most appropriate. The firm’s structure is invested primarily in equity, for the most part (other than twice in their history) not incurring any debt. Although the company originally seemed to pride itself in not incurring debt it’s evident that it has long-term affects on the value of the firm. Whether they considered that less debt would provide them with less risk or not, the fact is that they are not maximizing the value of their firm completely by staying away from debt financing. Although risk will increase when their debt increases, debt financing will lower the cost of capital primarily due to tax reduction. The firm will never reach their full potential by acting this conservative with their financing, and in return this affects their shareholders and payout policies. As stated in the case, “Despite the company’s profitability, returns to shareholders had been somewhat below average”. This is due directly to their net income and the amount of book equity. Subsequently, Blaine’s ROE in 2006 was extremely lower than that of its peers. This creates a big...
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...CASENI N etFlix.com, Inc. In July 2000, Reed Hastings, chairman ,md CEO of NetFlix.com, Ine., faced a criticaI deci:;jon. Thrl'C months earlier, following one of tl1l' worst episodes O!l record for the NASDAQ market, NetFlix had submitted it:; 5-1 filing for its initial Pllblic offering (Iro).! A:; il rl'sult of thl' market downturn, many Internet companies had been forced to withdraw their 1['0s. Invl,:-;tment bankers indicated to Hastings that NetFlix would 11(.'Cd to show positive cash flows within a twdw-month horizon in order to have a succes.,,,flll offering. Hastings knew that NetFlix was at a crucial stage. With revenU($ doubling evcry six months, NetFlix was enjoying tremendolls stlccess. But continucd succcss depcnded on thl' company's ability to sustain triple-digit growth (or the fOfesceable future. Soon, Hastings would have to decide whether or not to proceed with the company's anticipated IPO. Hastings askl..'\l Barry McCarthy, the chicf finnnciai officer, to re-('vnluate the cash flow requircments of thc company's currcnt business pian, to suggest modificùtions that would improvc the company's projected cnsh flows, and to makc ù rccommcndation on whether the company should go forward with its plùnned offcring. As McCarthy rcviewed the existing NetFlix business model, hl' considered possiblc chùnges that might allow thc company to procccd with its planncd IPO ùnd yet sustùin thc typc of futtlrl..' growth that would be nccL,:-;sary for thc compùny to achieve...
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...4040 OCTOBER 08, 2009 TIMOTHY LUEHRMAN JOEL HEILPRIN Blaine Kitchenware, Inc.: Capital Structure On April 27, 2007, Victor Dubinski, CEO of Blaine Kitchenware, Inc. (BKI), sat in his office reflecting on a meeting he had had with an investment banker earlier in the week. The banker, whom Dubinski had known for years, asked for the meeting after a group of private equity investors made discreet inquiries about a possible acquisition of Blaine. Although Blaine was a public company, a majority of its shares were controlled by family members descended from the firm’s founders together with various family trusts. Family interests were strongly represented on the board of directors as well. Dubinski knew the family had no current interest in selling—on the contrary, Blaine was interested in acquiring other companies in the kitchen appliances space—so this overture, like a few others before it, would be politely rebuffed. Nevertheless, Dubinski was struck by the banker’s assertion that a private equity buyer could “unlock” value inherent in Blaine’s strong operations and balance sheet. Using cash on Blaine’s balance sheet and new borrowings, a private equity firm could purchase all of Blaine’s outstanding shares at a price higher than $16.25 per share, its current stock price. It would then repay the debt over time using the company’s future earnings. When the banker pointed out that BKI itself could do the same thing—borrow money to buy back its own shares—Dubinski had asked...
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...UNIVERSIDADE ESTÁCIO DE SÁ MBA EM GESTÃO FINANCEIRA E CONTROLADORIA Fichamento de Estudo de Caso Lidiane Regina Nogueira das Neves Trabalho da disciplina Fundamentos da Matemática Financeira e Estatística Aplicada Prof. Geraldo Gurgel Filho Itaituba – PA 2015 Estudo de caso: Blaine Kitchenware Inc.: estrutura de capital FUNDAMENTOS DA MATEMÁTICA FINANCEIRA E ESTATÍSTICA APLICADA Blaine Kitchenware Inc. REFERÊNCIA: LUEHRMAN, T. & HEILPRIN, J. Blaine Kitchenware Inc.: estrutura de capital. Boston, MA: Harvard Business School, caso LACC # 413-P02, 8 de Outubro de 2009. Os autores descrevem a atividade da empresa de capital aberto Blaine Kitchenware Inc. e em seguida fazem uma análise do seu desempenho financeiro e políticas financeiras. A BKI é uma empresa de médio porte, fabricante de eletrodomésticos para cozinhas residenciais, cuja “maioria das ações pertencia a descendentes dos fundadores da empresa, assim como a diversos trusts da própria família” (p.1). A Blaine tinha pouco menos de 10% do mercado e o setor cresceu apenas 3,5% anuais de 2003 a 2006 devido a concorrência com importados e preços agressivos dos hipermercados. Esta atuava em três segmentos: utensílios para preparo de comida, para cozinhar e para o preparo de bebidas, sendo os dois primeiros os de maior geração de receita. A empresa introduziu no mercado produtos com tecnologia “smart”...
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...JOB E: Career Opportunities: Dishwasher SUMMARY: As a Dishwasher you will be responsible for ensuring that our production teams have sanitary tools and workspaces. This includes all duties related to dishwashing: unloading kitchen deliveries and cleaning all of the dishes, utensils, pots and pans. Other areas of responsibility include food prep work and maintaining food quality and sanitation in kitchen. DUTIES: - Wash, rinse, and sanitize dishes, pots, pans, and implements used by the store in preparing foods for sale. - Follow and comply with all applicable health and sanitation procedures and adhere to safe work practices. - Maintain cleanliness of floors, mats, drains, walls and shelves of kitchen area. - Operate and sanitize all equipment in a safe and proper manner. - Perform food preparation work as directed. - Accept and process product from Receiver. - This job posting is intended to describe the general requirements for the performance of this job. It is not a complete statement of duties, responsibilities or requirements. Other duties not listed here may be assigned by leadership. REQUIREMENTS: - Ability to follow instructions and procedures. - Good interpersonal skills and willingness to work as part of a team. - Strong work ethic and integrity. - Available for flexible scheduling to meet the needs of the department. - Use of box cutters. Essential Job Functions: * Stand and walk for extended periods of time. * Bend and stoop to grasp...
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...CHAPTER I Technical Aspect This chapter describes the activities to be done before the business will operate as a business. -Target Opening Date: July 1, 2009 Table 1 Pre-Operational Activities |Business Plan |Target Dates | |Renovation of the Business Space |June 8- 15, 2009 | |Application of Permits and Licenses |June 11-25, 2009 | |Selection and Buying of Equipment and Office Furniture |June 16-25, 2009 | |Arranging and Positioning of Equipment and Furniture |June 26-27, 2009 | |Trial Operation |June 28, 2009 | |Normal Operation |July I, 2009 | | | | Table I shows the different activities that “YOUR CHOICE FOOD SERVICE” will have to accomplish from the month of June 2009 until the business will start on July 1, 2009. It reflects the planned activities before the...
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...Kitchen Design Decide on a design when you prepare for a commercial kitchen renovation. Look at your menu and determine your design budget. Plan your project with an understanding of your work flow, which can set the tone and mood of your staff. Aim for the best kitchen flow to make the best use of staff time and create a positive and organized workplace. You may use an assembly-line approach to kitchen traffic because you'll be using the same food preparation methods daily. Speak with a professional commercial kitchen consultant about your vision and budget. Some of the topics to discuss include proper lighting, equipment and ventilation. Seek written proposals from three to five commercial kitchen consultants. Kitchen Equipment Prepare a list of your desired kitchen equipment, including cost estimates and frequency of use. Your kitchen equipment will include preparation and work tables, refrigerators and freezers, and pots, pans and other cooking implements. Renovate your commercial kitchen to maximize the efficiency of your space. You can place your preparation and work tables along the kitchen walls, on an island, or use a combination of the two. Consider how many pieces of food equipment you need to purchase and how you will store the equipment. A kitchen of 100 square feet or less can use a 2-light fluorescent; up to 250 square feet takes a 4-light fluorescent. Larger than 250 will need the 4-light plus additional lighting. Everlast Floor's resin-rich formula...
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...Micheal Smith Mrs. Agee English III January 29, 2014 How to make Grilled Cheese Cooked bread and cheese is an ancient food eaten by historians around the world. But in the 21st century grilled cheeses is a delicacy among foods, rivaled by none. But the art of creating such a wondrous food takes more skill then given credit for. Grilled cheeses isn’t made its created, through specific and well thought strategies. For the creation of your grilled cheese you need the proper kitchen utensils, ingredients, correct grilling techniques, and the correct way to eat the sandwich. Proper Kitchen Utensils It’s no secret that to cook grilled cheese you need a place with electricity and a stove. SO first find a kitchen with a stovetop. The best pans to use are copper pans because of there ability to cook evenly. The best spatulas to use are nonstick so nothing in the pan will stick too it. If you are using an electric stove turn the eye on a low heat, to get the best golden brown toast. If your stove is not electric then use a light flame on the stove. Ingredients You can’t make grilled cheese without the basic ingredients, the bread, cheese, and type of butter. Once you have the pan nice and warm add butter. The type of butter you use depends solely on you. Weather its salted or unsalted, organic, whipped of just Pam butter. I prefer Pam because its nonstick butter and easy to spread on the pan. Once your pan is buttered and ready to go grab to pieces of bread and add one peace...
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...CONTACT DETAILS Name: VAHUL TALWAR Mobile: 0426617747 E-mail Address: vahul_25@hotmail.com OBJECTIVE I am a very hard working and honest person. Since secondary school I have developed many technical and customer oriented skills that I believe would be a great asset to any employer. I have worked in team environments and solely over the course of my career with great success. I am a self motivated person with a great will to learn and achieve both company and personal goals with my work. I am kind of person who gives preference to company goals keeping my personal goals aside. ROLES & RESPONSIBILITIES Kitchen in hand- Jimmy spices (uk) November-14 to sep 15 Responsibilities: • Wash dishes and other utensils • Maintain equipment and utensils • Help with chopping vegetables and cooking • Set up feast tables • Stock supplies including food and utensils • Clean garbage cans and maintain work areas • Prepare individual place settings • Sweep and scrub floors and windows Kitchen in hand – platform 3 July 2013 - Oct 2014 Company – jimmy spices Responsibilities: Making sure that the chef has everything they need to carry out their duties. Assisting the Kitchen Manager in food prepping, cooking and cleaning. Entering recipes and ingredients into spreadsheets. Completing a list of tasks every day. Helping to prepare and serve meals for customers. Washing up dishes and kitchen utensils. Cleaning kitchen...
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...As I bring the freshly washed dishes back to the counter for a refill, I am quickly surrounded by a mass of purring felines clawing at my sneakers. Grabbing the food from the freestanding pantry, I begin to fill the dishes, counting each scoop in my head until I reach the third and final one. Avoiding the trail of cats following my every step, I place the bowls of food back down on the ground, observing the swarm of cats circling their meal; waiting for an open spot. Making my way back to the other room, I begin my next task. Finding an unused brush on the concrete floors, I start scraping away the film of cat hair that coats each bed. I peer into one of the small cat houses to see Dymo, an orange tabby cat who was abused as a kitten. As...
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