The Impact Of A Share Repurchase Program For A Fictional...

Summary We considered the impact of a share repurchase program for a fictional company – Blaine Kitchenware, Inc. It was determined that the liquidation of $209 million in cash and marketable securities and the addition of $50 million in long-term would result in a capital structure which was reasonable and sustainable. Overall, tax expense would be lower, the value of the firm would increase and the riskiness of the company’s equity would edge just a touch higher. From the perspective of both family and non-family shareholders, a share repurchase program is the right thing to do. The only possible objector to the proposal would likely be the U.S. Secretary of the Treasury. Background information Blaine Kitchenware, Inc. (BKI) is a publicly-traded, United States-based producer of residential kitchen small appliances (e.g. waffle irons, coffee makers, etc.). 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