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

Satisfactory Essays

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 …show more content…

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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