Nokia OYJ: Financing the WP Strategic Plan

1. Nokia is considering issuing debt, issuing equity, eliminating its dividend, or decreasing cash to meet its funding needs. What are the benefits and costs of each alternative?
2. According to case Exhibit 10, Nokia estimates it may need EUR4.3 billion in external funds under the downside scenario (the 4.3B external financing needed is calculated as total assets - total liabilities & equity from the downside 2012E balance sheet).Adjust the pro formas assuming that Nokia, alternatively, does one of the following:
3. Issues EUR4.3 billion of long-term debt (assumingcredit rating falls to an estimated BB/B rating)
4. Raises EUR4.3 billion in equity
5. Eliminates its dividends
6. Decreases cash

To the extent that not all of the funding is needed or that more funding is required in any given year (i.e., the pro forma balance sheet does not balance), assume that cash is increased or decreased accordingly.

For scenarios a through d above, calculate the effect on Nokia'sEarnings per share,Cash balance, and cash-to-sales ratio.