What was wrigleys wacc before recapitalization

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Reference no: EM131452860

Assignment:

1. Wrigley Case Study Individual Questions

a. What is the present value of the tax shield from taking on the new debt?
b. When will the price of the stock adjust to the announcement of the recapitalization (if it takes place)?
c. What is the expected price of the stock when the stock is repurchased?
d. How many shares will be repurchased?
e. What is the expected price of the stock after the stock is repurchased?

2. Assuming the Wrigley family does not sell back any of their shares to the company, how (if at all) will their wealth change from the recapitalization? See the footnote on page 84 for the number of shares that the Wrigley family owns.

3. What was Wrigley's WACC before recapitalization?

4. What will Wrigley's WACC be after recapitalization?

5. Taking on the role of BlankaDobrynin, would you recommend that Wrigley complete the recapitalization? Why or why not?

6. There is a fairly significant error in the assumptions of the case. What is it?

Attachment:- wrigley_spreadsheets.xlsx

Reference no: EM131452860

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