3. Consider the following repurchase proposal: Blaine will use $209 million of cash from its balance sheet and $50 million in new debt-bearing interest at the rate of 6.75% to repurchase 14.0 million shares at a price of $18.50 per share. How would such a buyback affect Blaine? What are the effects of this recommendation on the firms financial statements? Does the large share repurchase create any value? If so, where is the value created?

Exhibit 1 Blaine Kitchenware, Inc., Income Statements, years ended December 31, (\$ in Thousands) a. Blaine's future tax rate was expected to rise to the statutory rate of 40%. ] 1 ] 1 1 I 1 ] N acquisitions. Exhibit 1 Blaine Kitchenware, Inc., Income Statements, years ended December 31, (\$ in Thousands) a. Blaine's future tax rate was expected to rise to the statutory rate of 40%. ] 1 ] 1 1 I 1 ] N acquisitions