Read the “Case Law: Winfield Refuse Management, Inc. Raising Debt versus Equity” and answer the following questions:

1. What are the annual cash outlays associated with the bond issue in 2013? How about the common stock issue? How would tax change your calculation? How do you account for the interest tax shield?

2. If you are the CEO of the company, what is your financing decision for Winfield? Defend your decision. Make a pros and cons list for both debt issue and equity issue

3. What is your final recommendation for Winfield?

Answer rating: 100% (QA)

1 Concerning the outlays associated with the bond issue in 2013 There will be cash dividend of 75 million on the stock added The bond principlethe issue of common stock will amount to 625 million in a ... View the full answer