In 2018, Mastercard Incorporated had a market capitalization of $200 billion, debt of $6.5 billion, cash of

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In 2018, Mastercard Incorporated had a market capitalization of $200 billion, debt of

$6.5 billion, cash of $8.2 billion, and EBIT of over $7 billion. If Mastercard were to increase its debt by $1 billion and use the cash for a share repurchase, which market imperfections would be most relevant for understanding the consequence for Mastercard’s value? Why?

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Corporate Finance The Core

ISBN: 9781292431611

5th Global Edition

Authors: Jonathan Berk, Peter DeMarzo

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