Wm Wrigley Case

Management Summary

Based upon the analysis of WM Wrigley Jr. Company’s financial data provided and the recommendation to leverage assets to increase shareholder equity, the best opportunity for the company would be to increase debt by $3 billion in order to pay out a dividend resulting in an increase in value by 9%.

Although not all of the financial measures clearly determine that increasing debt to issue dividends or a stock repurchase out weighs one over the other in value, the calculations indicate that there will be a 9% increase in the stock prices if WM Wrigley Jr. Company pays out a dividend to shareholders, which in turn out weighs the risk of increasing debt and therefore increases value for all shareholders.

Active Investor

Purpose

By definition Blanka Dobrynin’s “active investor” strategy involves identifying opportunities for a company to reorganize in order to achieve an investment gain. In other words, she finds opportunities in which companies are missing out on new strategies which could potentially create more wealth for the shareholders. Blanka Dobrynin plays the role of financial entrepreneur in order to achieve an investment gain for all the shareholders including herself and her company. This includes presenting to the board of directors of the reorganized company and utilizing her financial expertise to introduce them to the financial benefits of restructuring and leveraging assets. This strategy also includes a large investment by Blanka and her company to help influence and educate the board of directors as one of the major shareholders in the company.

In regards to Wrigley, Blanka Dobrynin is hoping to determine if Wrigley is inefficiently financed and if so, how much restructuring can they handle and still remain profitable. Wrigley's is doing well, with no debt in a low technology industry but according to Blanka's strategy could have the potential to create more value for the company's shareholders by increasing their debt and...