Calculate Wrigley’s WACC pre- and post-recapitalization explaining each step? Is the change in WACC a sufficient motive for recapitalization?

Show the effects of issuing $3 billion debt and using the proceeds to pay dividend or repurchase shares on the balance sheet [assets, liabilities and equity] of the Wrigley Company? On the number of shares outstanding, EPS, market value of equity and book value of equity?

Case study. "WM Wrigley Jr. Capital Structure, Valuation and Cost of Capital"

Answer rating: 100% (QA)

To calculate Wrigleys Weighted Average Cost of Capital WACC pre and postrecapitalization we need to follow these steps and consider the effects of iss... View the full answer