Professional Documents
Culture Documents
593.3
13.9
1472.8
30
4665
360.3
376.1
877.6
360.3
626.8
626.9
9.471383
Exihibit 4
Excerpts
Tax rate
Dividend Payout
Interest Rate Before tax
Interest Forgone
Details of Recapitalization
48%
60%
14%
32.62
30% Debt ratio
Exess Cash
Additional Debt
Total Repurcahse
ReductionCommon Stock
233.00
362.20
595.20
19.84
50% debt
233.00
612.90
845.90
28.20
70% Debt
4131.20
922.18
122.86
799.32
383.67
415.64
0.40
415.24
249.15
118.94
3.49
2.09
3176.40
360.3
877.6
376.1
6.469114 4.924459
70% Debt
233.00
863.70
1096.70
36.56
3.16201
Actual
30% Debt
3.20
1.90
$9.47
33.80%
415.1
50% Debt
3.33
2.00
$6.47
51.50%
17.5
3.41
2.04
$4.92
69.20%
10.5
70% Debt
3.49
2.09
$3.16
110.50%
7.5
Interest Coverage
Total Debt/ Lending
Stock Price at 9.43
1.87
$31.42
9.827
$32.17
10.04
117.92
$32.92
10.3
6.30%
6.70%
6.80%
7.00%
$30.00
$0
$31.58
$285.69
0 $39.99
$0.26
0
$32.31
$406.03
$56.84
$0.36
$33.16
$526.41
$73.69
$0.47
$30.00
Risk
DOL
DFL
EBIT Indifference
If EBIT reduces 10%
Impact on Net Income
Original PAT
Changed EBIT
Changed EPS
Changed DPS
50.54
84.22
$9.39
499.60
$9.39
504.81
5.21
521.65
16.85
538.81
16.85
Actual (.9%)
$3.18
$1.90
$9.47
30%
$3.33
$2.00
$6.47
50%
$3.41
$2.04
$4.92
70%
$3.49
$2.10
$3.16
33.80%
51.50%
69.20%
110.50%
415.1
$30.00
17.5
$31.42
10.5
$32.17
7.5
$32.92
9.43
9.01
8.8
8.6
6.30%
$30.00
$0
$0
6.70%
$31.58
$285.69
$1.83
6.80%
$32.31
$406.03
$2.61
7.00%
$33.16
$526.41
$3.39
AAA
AA
17%
BBB
BB
24%
Warner -Lambert
Debt Ratio
Interest Coverage
Rating
American Home Products
Debt Ratio
Interest C
Debt Rating
S&P
WarnerL Interest Coverage
Actual
30%
50%
70%