Problem Statement Hershey needs to raise $1Bn to build four new manufacturing plants outside the United States to implement their strategic plan The Board of Directors and Executive Leadership team are evaluating how best to raise this capital Complete an analysis to determine the best solution Currently, Hershey has the following input for the analysis Interest Rate 3 Tax Rate taxes in 2014 EBT 459 1,306 35 Stock Price (January 2015) $106 of Shares Outstanding 220Mn EBIT in 2014 was $1 3Bn so the team wants to evaluate options based on $1 0Bn and $2 0Bn For the evaluation, they will consider 100 stock, 100 debt and 50 50 combination a Prepare an EPS EBIT analysis for Hershey using the above information (15 points) b Develop an EPS EBIT chart based on the analysis completed in Part a (5 points) c In 2014, Hershey issued a dividend, $2 04 share Update your analysis to show the impact of the dividend (5 points) d What recommendation would you give the Board on the source of the capital required (5 points)

Question

Problem Statement  Hershey needs to raise $1Bn to build four new manufacturing plants outside the United States to implement their strategic plan  The Board of Directors and Executive Leadership team are evaluating how best to raise this capital  Complete an analysis to determine the best solution  Currently, Hershey has the following input for the analysis  Interest Rate  3  Tax Rate   taxes in 2014   EBT   459 1,306   35  Stock Price (January 2015) $106   of Shares Outstanding  220Mn EBIT in 2014 was $1 3Bn so the team wants to evaluate options based on $1 0Bn and $2 0Bn  For the evaluation, they will consider 100  stock, 100  debt and 50 50 combination  a  Prepare an EPS EBIT analysis for Hershey using the above information  (15 points) b  Develop an EPS EBIT chart based on the analysis completed in Part a  (5 points) c  In 2014, Hershey issued a dividend, $2 04 share  Update your analysis to show the impact of the dividend  (5 points) d  What recommendation would you give the Board on the source of the capital required  (5 points)

Accepted Answer

The Answer is in the image, click to view ...

Question

Problem Statement: Hershey needs to raise $1Bn to build four new manufacturing plants outside the United States to implement their strategic plan. The Board of

Step by Step Solution

Step: 1

Get Instant Access to Expert-Tailored Solutions

Step: 2

Step: 3

Ace Your Homework with AI

Recommended Textbook for

Public Finance

Students also viewed these Finance questions

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question

Question