ial Data, 1995-2004 (in SEK millions, except where xhibit 2 Swedish Match, Selec
ID: 2729701 • Letter: I
Question
ial Data, 1995-2004 (in SEK millions, except where xhibit 2 Swedish Match, Selected Financial Data, 1995-2004 (in SEK illions, except wher Summary Operating Data 7,416 3,653 2.179 7.465 3,615 2,281 1,569 268 8,194 2.620 332 - Cost of Goods Sold -Other Operating Expenses EBITDA Depreciation and Amortization 1,146 1,314 1,179 107 504 1,576 EBIT 178 1,530 1,091 - Interest Expense + Other Items 322 1,558 1,046 563 EBT 482 716 - Income Tax Expense Net Income 1,103 Balance Sheet 942 1,939 6,877 Cash and Shortl-term Investments 804 4,089 2,239 1.241 10,562 Current Assets 3,278 PP&E; 1,241 Other Assets Total Assets 6,646 7,132 Current Liabilities Total Interest-Bearing Debt 129 4,331 209 Of which: Long-term Debt 692 2,368 6,877 1.191 2,308 10,562 Other Liabilities Equity, including minority interest Total Liabilities and Equity 2,992 7,132 6,646 Cash Flow Data and Stock Price Capital Expenditures Cash Acquisitions, net Dividends Paid Share Repurchases Shares Outstanding, M Year End Share Price (krona/share) Market Value of Equity 292 60 510 393 157 1,147 25.52 1,072 26.28 12,801 12,331 12,192 10.999 Selected Growth Rates and Ratios EBITDA Margin EBIT Margin Book Leverage (debt/debt plus equity) (%) Market Leverage (debt/debt plus market capitalization) (%) Book Equity Assets 19.8% 15.9% 214% 21.0% 174% 18.0% 21.4% 652% 30.1% 7.6% 34.4% 28.3% 25.0% 42.0% 21.9% Source. Capital IQ, accessed September 2011, and annual reports C "Other Assets" includes Long-term Investments, Goodwill, Other Intangibles, and Other Long-Term Assets Cash used for purchasing businesses and subsidiaries, minus net p a Other items include Investment Income, Income from Affiliates, Currency Exchange Gains, Restructuring Charges, Gair bCurrent Assets" includes Accounts Receivable, Inventory, and Prepaid Expenses. d-Current Liabilities" includes Accounts Payable. Accrued Expenses, Current Income Taxes Payable, Deferred Tax Liabil e "Other Liabilities" incluc businesses and subsidiaries, minus net proceeds from the divestiture and sale of businesses arnExplanation / Answer
Answer 1:
Company will save by issuing fixed krona bonds = (Value of bond x Yield from bond) x (tax rate%)
= (SEK 4 Billion x 4.5%) x 28%
= SEK 5,04,00,000
Value of interest tax shield = Tax saving from bond interest x no. of years for which bond issued
Answer 2:
(A) There will not be any change in balance sheet after announcement of leveraged recap because no transaction completed after announcement immediately.
(B) After issue of SEK 4 billion debt balance sheet will have following changes
(C) After repurchase balance sheet will have following changes
Note: face value of equity shares is not given in the question, so exact amount in (C) above can not be calculated in the absence of this information.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.