Case Note: Winfield Refuse Management, Inc.: Raising Debt vs. Equity

731 Words Apr 14th, 2013 3 Pages
Case: Winfield Refuse Management, Inc.: Raising Debt vs. Equity

I. Case situation: Decision Proof: 1. First part: "..., it was Sheene's responsibility to lead the discussion on how to finance a major acquisition...reach a resolution this time." 2. Last part: "Board Discussion","However, there was decidedly less agreement on the matter of financing..." 3. The article is about background and arguments about whether to raising debt or equity.

II. Options: Funding the acquisition through a bond issue or common stock?

III. Creteria: 1. Maximum the interest of shareholders/not hurt the existing shareholders' interest. 2. Stable the stock price and make stock value growth. 3. Solidify its competitive
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How many shares did the company issue in the market?

"The Winfield family and senior management held 79% of the common stock." →The CFO missed the point about ratio of family control. $15 million family 80% = $11,850,000 others 20% $22.5 million family 52% = $11,850,000 others 48% → The family control would be weakened and it may hurt family interest if issuing stocks. What's more, if one of the family member sold his/her share, the Winfield Refuse Management, Inc would no longer be a family company.

"The management team had proven successful in the post-acquisition phase..." →The company

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