For the case The WM. Wrigley Jr. Company: Capital Structure, Valuation, and the Cost of Capital(Darden Case: UVAF1482) please answer the following questions and explain your reasoningwhere appropriate:

1. In the abstract, what is Blanka Dobrynin hoping to accomplish through her active-investor strategy?

2. What would be the effect of issuing $3 billion of new debt and using the proceeds to repurchase shares on:

          a. Wrigley’s share price? Please compute. 

          b. Wrigley’s number of shares outstanding? Please compute. 

          c. Wrigley’s book-value and market-value weights? Please compute. 

3. What is Wrigley’s current (pre-recapitalization) WACC?

4. What would Wrigley’s WACC be after the recapitalization? Does Wrigley’s WACC change? Please discuss why and the size of the change. 

5. Should Blanka Dobrynin pursue the recapitalization proposal with Wrigley’s board of directors?

Answer rating: 100% (QA)

Answer 1 Blanka work as manager of a company Aurora Borealis The company takes advantage of a strategy that is an Active Investor Where the firm grace ... View the full answer