Summary
Contents
Subject index
The central theme of this textbook is value-based financial management with the author's basic premise being that value creation should be key to making financial, strategic and operating decisions.
Modern financial theory and valuation techniques are introduced to enable students to make complex business decisions when starting their careers.
Corporate Finance has been revised and expanded to include new topics such as: project finance; leveraged buyouts, EVA and incentive compensation. It also includes numerous real-life case studies to illustrate the practical application of theory.
Leveraged Recaps and Buyouts
Leveraged Recaps and Buyouts
Objectives
- Why do companies undertake high leverage transactions?
- What is the impact of high leverage on organizational performance?
- What are the sources of value and distress in high leverage transactions?
- How should HLTs (high leverage transactions) be evaluated?
Hindustan Lever Limited (HLL) is a subsidiary of Unilever (UK). In October 2001, the company announced a bonus debenture issue in the ratio of one bonus debenture for every share held. The debentures would be redeemed in 3 years and carry an interest of 9 percent per annum. The company has a rather high cash (and bank) balance(s) amounting to Rs 911.74 crore. So it was exploring ways of providing extra dividend to shareholders. Instead of distributing a special cash dividend ...
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