INSTRUCTIONS
Read Case 32 starting on page 391 in the text book. Use the lesson video to answer the following questions in your case analysis:
- What is going on at CPK? What decisions does Susan Collyns face? What do you recommend?
2. Maybe we can all be right (where all alternatives would be correct). Is there a case for that?
3. How does debt add value to CPK?
4. What is the case for not doing the recapitalization?
5. What should Collyns recommend?
ANSWERS
CPK, founded in 1985, is experiencing some significant changes despite existing challenges facing the restaurant industry. For instance, the company has expanded both domestically and internationally, with 213 outlets in 28 states and six foreign countries. The company’s success can be attributed to its emphasis on xxxxxx xxxx. However, Susan Collyns, the CFO of CPK, must make critical decisions to continue the success of the company. For instance, she must decide on whether to recommend a share repurchase program. This initiative will involve utilizing CPK’s existing line of credit and introducing debt financing to repurchase shares at a lower price (xxxx et al., 2018)… To access full answer, use the purchase button below.