Do You Believe Blaines Current Capital Structure Finance Essay

Do You Believe Blaines Current Capital Structure Finance Essay Do you believe Blaines current capital structure and payout policies are appropriate? Why or why not? Blaines capital structure and dividend policy are not entirely appropriate from the point of view of a shareholder of the firm. The reasons for that can be summed up as follows: No leverage: The optimum mix of debt and equity in the capital structure will maximize shareholders return. Company should take on debt to acquire new firms and expand its operations. Low ROE : Attributed to Low leverage 2006 ROE data clearly shows up that ROE of all the comparable firms are much higher than that of Blaine. Increasing Dividend payout ratio As calculated in Question no.3, the cost of equity of the firm is close to 9% whereas ROE is 11%. This is a good proposition for shareholders. This can be enhanced by acquiring other companies using cash balance that the company has. Decreasing EPS Even when EPS is constantly decreasing over the last three years, the policy of giving more or less same amount in dividend may cost company in future. Way of financing of new acquisitions Blaine Inc. should rather raise capital in debt rather than issuing new stocks to raise capital. This will ensure EPS constant and will be good for shareholders. Should Dubinski recommend a large share repurchase to Blaines board? What are the primary advantages and disadvantages of such a move? No, Dubinski should not recommend a large share repurchase to the board. The reason for that is although the firm is public listed, still a large percentage of share is owned by family itself. Therefore, buying back the shares is as good as unlisting the company. Secondly, there are growth avenues wherein the company may require cash. The company should, like last two years, go for acquisition. This will bring value to shareholders. Else, during the times of new acquisitions, company would have to raise capital from the market and due to flotation cost; the cost of equity will be much higher. Consider the following share repurchase proposal: Blaine will use $209 million of cash from its balance sheet and $50 million in new debt-bearing interest at the rate of 6.75% to repurchase 14.0 million shares at a price of $18.50 per share. How would such a buyback affect Blaine? Consider the impact on, among other things, BKIs earnings per share and ROE, its interest coverage and debt ratios, the familys ownership interest, and the companys cost of capital. Effect of Share Buyback Particulars Value Remarks Equity Capital_Pre Buyback ($) 488,363,000 2006, Exhibit 2 Equity Capital_Post ($) 279,363,000 No. of Shares outstanding before buyback 59,052,000 No. of shares bought back 14,000,000 Total outstanding Shares 45,052,000 EPS_Old($) 0.91 EPS_New ($) 1.19 Percent change in EPS 31.08% P/E ratio 17.86 Market Price (S) 21.30 Percent change in Share price 19.28% Debt_equity Book Value 17.90% Debt_equity Market Value 5.21% Debt interest rate 6.75% Interest to be paid ($) 3375000 Interest coverage ratio 0.05 ROE 0.11 ROE_new 0.19 Change in ROE 74.52% Cost of Equity 9.01% Cost of Debt 6.25% Effective Tax rate 40.00% Expected future tax rate D/V 4.95% WACC 8.75% WACC_Old 9.01% Change in WACC -2.89% Equity beta Calculation for the Firm Market Cap Equity beta (Net)D/E Net Debt Cash Securities Total Debt D/E (1) (2) (3) (4)=(1)x(3) (5) (6)=(4)+(5) (7)=(6)/(1) Home and Hearth Design 776,427 1.03 45.18% 350,790 21,495 372,285 47.95% AutoTech Appliances 13,978,375 1.24 31.74% 4,436,736 536,099 4,972,835 35.58% XQL Corp. 5,290,145 0.96 17.97% 950,639 21,425 972,064 18.37% Bunkerhill Inc. 3,962,780 0.92 6.01% 238,163 153,680 391,843 9.89% Easyliving Systems 418,749 0.67 -15.47% -64,780 242,102 177,322 42.35% Blaine Kitchenware 959,596 0.56 -24.06% -230,879 230,866 -13 0.00% Average 25,386,072 0.90 10.23% 25.69% Unlevered Beta 0.78 Beta_Blaine 0.80 Ownership Scenario: For last 3 years and post share buyback 2004 2005 2006 2007 Outstanding Shares 41,309,000 48,790,000 59,052,000 45,052,000 Ownership of Founders descendants 62% 52% 43% 57% Assumptions Used Effective Tax rate has been taken equal to 40%, same as for Blaine. As a member of Blaines controlling family, would you be in favor of this proposal? Would you be in favor of it as a non-family shareholder? As a family member of Blaine, the news of buyback has to be evaluated in both the ways. The Pros are: Consolidating Control- This will increase the shareholding close to 57%. Return of Cash Surplus to Shareholders-As of now in April, 2007, there are no any plans of buybacks. Therefore, keeping cash intact leads to opportunity cost of shareholders. This will add value for shareholders. An effective defense against takeover- as the market is consolidating, it will be a wise decision to protect the company from hostile takeovers. The cons are: Effect on expansionary plans- As cash will be used to buy back shares and the company wont be able to raise money from markets in the near future, opportunities of acquisitions will be marred. Even if, company will raise capital from equity market, flotation cost will be high and so cost of equity will be comparatively high. Use of Leverage- the Company has been against the policy of taking debt. Taking debt of $50 million for share buyback will not go in line with the companys policy.

Computers Have Impacted Me in Many Ways :: Personal Narrative Writing

Computers Have Impacted Me in Many Ways First of all, I want to begin by saying that in order for me to make this paper interesting at all, I am willing to pretend that computers are somewhat fun and exciting but the truth is, I honestly can not stand anything that goes beyond the basics of a computer because if I try to go any deeper I am reminded that it has a bigger brain than I. Due to the fact that I have an undying frustration with these boxes of microchips, this may not be the most professional sounding paper in the world, but I will do my best in trying to make it fun and entertaining. Out of all of the topics that I saw on the list of what we could do this paper on, I found zero that actually interested me, but I chose one anyway. Well, actually, I more or less turned one of the topics into something that I could handle writing five pages on. I am going to talk about how computers impact me in my daily life and I will talk about my past experience with computers and the things that I have learned from them. Computers have impacted me in many ways. Although I do not like to be instructed in how to do certain assignments (web sites and so forth) I do enjoy being able to have the luxury to type a paper on the â€Å"easy to use,† Microsoft word. Being an English major, it is very important that editing be taken very seriously and it makes my life a lot easier knowing that if I get sick of making corrections on a 20 page paper, the computer will pick out the obvious ones so that it saves me time. This may sound like a lame reason, but it saves me a lot of time. Another thing that I love is that it’s so easy to make change to a document font in any way that I want. If I want the words to be size twenty-two then all I have to do is highlight and hit the button. If I want to make a cool cover page with different font styles I can choose from a variety of different designs. Two of my favorites are comic sans and futura xblkit bt.

Final Reflection on Community Service Learning Essay

A) The name of the agency was Thomas House Temporary Shelter and its mission is to provide a safe, supportive environment and resources necessary for homeless families with children to remain together while empowering them to become independent and self-sufficient. Their program also includes transitional shelter, case management, counseling, life skills development, employment assistance, resource assistance, children’s program, graduate extension program. At this agency, my role was to help young residents or children to succeed in school. I was to provide tutoring for homework help and any other academic work given by the agency. B) At this agency, it gave me a chance to develop educational relationship with children and to cooperate with other volunteers to successfully aid children with their studying. I never had a chance to teach a child before this community service but after teaching them, I was surprised how much I enjoyed working with them. This volunteering experience definitely improved how I will work with children in the future. C) In terms of putting myself to this community placement, it gave me a perspective on my own life to appreciate what I have and the family support that I received. Lots of children residing at the shelter experience abusive family relationship and poverty, which has a negative affect on their mental health. Just knowing what these children had to go through made me realize that I had it a lot better than they did and it taught me to be more thankful for what I have. Socially, by being part of this Thomas House Shelter agency, I was able to learn to be more approachable and out reaching to people. Emotionally, I was content that I can help out these children to better them. Intellectually, I felt smarter to be able to teach children when I have never taught children before. Lastly, professionally, I was able to remain professional relationship with the coordinator that was in charge of the shelter. D) Honestly, in the beginning of service learning, I had doubts about service learning and was expecting not much from it. However, by volunteering at the Thomas House Shelter agency, I was able to meet my service learning goals. I was able to enhance children’s self-esteem and confidence by complementing on their accomplishments. I was also able provide needed assistance to the children while complying with coordinator’s directions. I also learned about what single parent/mothers go through and what we can do to help them to establish a better family. Overall, the whole experience was meaningful and helpful to meet my service learning plan goals. E) As a result of my placement, I was able to positively influence children on education that it can be challenging. For example, one child that I was teaching was really smart but did not like to show that he was capable of doing hard problems. It seemed like he gets easily distracted and was not interested in showing his abilities to do problems. In order to get him involved with work, I had to encourage him and compliment how good he was at math. Then, he got more involved and he was finally able to tackle some problems that he was not interested before. In my opinion, I was able to encourage children in this community that were not encouraged before. F) In terms of CSL enhancing the understanding of the course material and making abstract concepts real, I really learned a lot about single mother parenting and poverty issues. The majority of the single parents at the shelter were mothers that were taking care of the children. From the text book, it stated that majority of single parent mothers are from minorities and at the Thomas house shelter, it certainly supported the statement. There were mostly African American single parents and Hispanic or Latino single parents residing at the shelter. There was only one White single parent residing at the shelter out of 15 or more families. It is a sad fact but minority women are the ones suffering the most from single parenting issues. G) The most difficult part about volunteering at the shelter is the working hours and number of volunteers working at the shelter. The volunteer starts at 5:00 PM and it would take me around 40 minutes to get to the shelter from school. Distance wise is no t that far but traffic is the cause for a long commute. Another difficulty that I faced is that there are too many volunteers so that I had to compete with the volunteers in order to make connections with the children. If I had a chance to have one on one relationship with a child, I would be able to make better connection in terms of child and a teacher relationship. The most satisfying aspects of my community work are that working with children and seeing them improve their grades in school. Even though these children are going through poverty and hard time, in the end they are the same children as any other children. They love to have fun and goof around and experiencing these children just made me a better person and content about myself. H) For the future CSL students, I high recommend volunteering for children if you never have. This was my first time working with children and it taught me the importance of teaching and family aspect of life. These kids are bright and fun, so if you learn to work with these kids to positively influence their life in a right path, it will give you a surreal feeling of accomplishment by working with them.

Gregor and Grete’s Transformation in The Metamorphosis by...

Franz Kafka wrote the short story Metamorphosis in 1912. No one can truly know what he aimed to accomplish with the story, but it is thought he wrote it to demonstrate the absurdity of life. The story is written with a very simplistic undertone, ignoring how completely ludicrous the situation that Gregor Samsa and his family are in. Metamorphosis is most often thought of in the scientific meaning of the word, which according to dictionary.com is a profound change in form from one stage to the next in the life history of an organism. It is also defined as a complete change of form, structure, or substance, as transformation by magic or witchcraft or any complete change in appearance, character, circumstances, etc. This word is generally†¦show more content†¦From 1889 to 1893 Kafka attended the boys elementary school at the meat market. After elementary school Kafka was accepted into the rigid Altstadedter Deutsches Gymnasium, a secondary school with eight grade levels at Old Town Square. He studied chemistry for two short weeks at the Charles-Ferdinand University before switching to law. He graduated with his Doctorate of Law on June 18th, 1906. Kafka is thought to have schizoid personality disorder, a personality disorder characterized by a lack of interest in relationships, a tendency to lead a solitary life, secretiveness, emotional coldness and at times sexual apathy while simultaneously living in a fantasy world. This illness explains why he wrote some of the stories the way he did. Kafka met Felice Bauer in 1912, they were engaged two times. Their relationship came to an end in 1917. Kafka began experiencing symptoms due to tuberculosis in 1917 as well. Kafka died June 3rd, 1924 of starvation due to tuberculosis. Kafka’s life history explains why Metamorphosis is written in the way that it is. The opening lines of Metamorphosis give a detailed description of the creature that Gregor has been transformed into, a cockroach. He reacts rather c almly, more concerned with work than the fact that he has turned into an insect. I wish we could see the story through the other characters point of view, particularly Grete’s. But, because we only know Gregor’s side of theShow MoreRelatedThe Metamorphosis : Grete s Transformation1120 Words   |  5 Pages The Metamorphosis: Grete’s Transformation Gregor Samsa appears to be the character who transfigures in the short novel called â€Å"The Metamorphosis,† but Grete, Gregor’s sister, transforms into a stronger and more independent woman throughout the predicaments in the book. After Gregor dies, a new light shines upon Grete, and her parents see her as a grown woman. The author says, â€Å"It struck both Mr. and Mrs. Samsa, almost at the same moment, as they became aware of their daughter’s increasing vivacityRead MoreThe Big, Bad, Socialism Bug1280 Words   |  6 Pages200 September 23, 2015 The Big, Bad, Socialism Bug A known socialist, Franz Kafka was especially taken with Karl Marx’s theory of alienation. The theory states that people lose their humanity as a consequence of living in divided social classes. The worker needs the labor to live, and misses out on intrinsic human needs; the worker is a worker first, a human being second (Fay). This concept is what frames The Metamorphosis: A man loses his humanity through unfulfilling work, and while losing hisRead MoreFranz Kafka s The Metamorphosis814 Words   |  4 PagesWhen Franz Kafka first penned his short novel The Metamorphosis in 1915, he had no idea that it would become one of the most influential pieces of fiction of the twentieth century, continuously being studied in colleges and universities across the Western world. The novel rotates around the life of a man named Gregor Samsa, who wakes up on a routine day, and suddenly finds himself transformed into an insect. As the story progresses, the reader can see how Gregorâ€℠¢s physical transformation triggersRead More Gretes Transformation in The Metamorphosis by Kafka Essay example1729 Words   |  7 PagesKafka wrote The Metamorphosis in 1912, taking three weeks to compose the story. While he had expressed earlier satisfaction with the work, he later found it to be flawed, even calling the ending unreadable. Whatever his own opinion may have been, the short story has become one of the most popularly read and analyzed works of twentieth-century literature. Isolation and alienation are at the heart of this surreal story of a man transformed overnight into a kind of beetle. In contrast to muchRead MoreAnalysis Of Franz Kafka s The Metamorphosis 1711 Words   |  7 Pagescertain theme that most readers can relate to. Franz Kafka, a renowned German-speaking fiction writer of the 20th century, uses a unique style of writing that many people believe is a telling of his own life story. In his well-known short story, â€Å"The Metamorphosis†, many similarities and connections can be seen between the main character, Gregor Samsa, and the author himself, Franz Kafka. A major comparison that can be made is the fact that both Samsa and Kafka died slow, lon esome deaths after being inRead MoreThe Meta Metamorphosis : A Depth Look Into The Metamorphosis Of Grete1073 Words   |  5 Pages28th, 2012 Word Count: 1,416 The Meta-Metamorphosis: An In-depth Look into the Metamorphosis of Grete In Franz Kafka’s The Metamorphosis, one can find two forms of metamorphoses. One, being the most apparent, is Gregor’s physical transformation from a man to an insect, and secondly one may find a subtext of a form of transformation of Grete. This transformation is one that allows Grete to switch roles from being a young sister role to a motherly role to Gregor, and to lastly a judge with the decisionRead MoreIsolation In Franz Kafkas Metamorphosis1145 Words   |  5 Pagesmain character, Gregor Samsa, also felt this way. Isolation refers to the situation of being alone and/or without others around. Due to his transformation, Gregor was immediately isolated unlike his other family members who chose to be away from their problems in the world. Everyone in the Samsa family has their own reasons of why they chose to be isolated from society. Due to these choices, the entire Samsa family also undergo transformations. The book, Metamorphosis by Franz Kafka , reveals how isol ationRead MoreThe Symbolic Nature of Sacrifice and Transformation in Kafka’s The Metamorphosis1096 Words   |  5 PagesMaking of an Allegory,† by Edwin Honig and â€Å"Franz Kafka’s ‘Metamorphosis’ as Death and Resurrection Fantasy,† by Peter Dow Webster illuminate how sacrifice and transformation are a vital part of the deeper meaning of The Metamorphosis. Gregor Samsa is an ordinary young man until he wakes up one day as a giant vermin; metamorphosised into something horrendous and reviled by the world. Through Honig’s and Webster’s critical essays, this transformation, as well as many more, and sacrifice made byRead MoreFranz Kafka s The Metamorphosis1222 Words   |  5 Pagestear you down. In Franz Kafka’s The Metamorphosis this destruction is what is seen in the Samsa family. Through what they believe to be necessary, Gregor’s family destroys the environment that he knows, Gregor Samsa destroys his family, a nd Mr. and Mrs. Samsa bring unnecessary destruction to both of their children. The very nature of Kafka’s The Metamorphosis is change and the effect on people. The first very obvious change is that of Gregor Samsa into a â€Å"monstrous vermin† (Kafka 3). However, oneRead MoreAnalysis Of Kafka s The Metamorphosis 989 Words   |  4 PagesRalph Freedman’s critical essay titled â€Å"Kafka’s Obscurity† on Franz Kafka’s The Metamorphosis delves into the idea that from changes in the protagonist’s physical limitations, familial bonds, and his being â€Å"[he] is finally reduced to a mere speck of self-awareness which is ultimately extinguished† (Freedman 131). General questions of â€Å"why† and â€Å"how† are almost immediately dismissed due to the calm and monotonous tone that Kafka implements throughout the novel. Instead, the reader is encouraged to