Task:

1.What do you think Blanka Dobrynin is trying to achieve through her active investor strategy?

2.What will be the effects of issuing $3 billion of new debt and using the proceeds to either pay a dividend or re-purchase shares on:

a.Wrigley’s outstanding shares;

b.Wrigley’s book value of equity;

c.The price per share of Wrigley’s stock;

d.Earnings per share;

e.Debt interest coverage ratios and financial flexibility;

f.Voting control by the Wrigley family;

3.What is Wrigley’s current WACC structure and what would you expect to Wrigley’s WACC if it issues $3 billion of new debt and using the proceeds to either pay a dividend or re-purchase shares?

4.Do you recommend that Blanka Dobrynin issue $3 billion of new debt and using the proceeds to either pay a dividend or re-purchase shares?