M13-02-LeveragedRecapsManagementControl

Model13-02LeveragedRecaps–PaymentofLargeCashDividendA.BasicDataInputsMarketValueofEquityperShare$24NetOperatingIncome(NOI),millions$30SharesOutstanding,millions10SharesOwnedByManagement,millions1EachNonmanagementShareholder(SH)ReceivesCash24.00$Stub1@$44.00$28.00$EachManagementShareHoldsStub7@$428.00$B.SourcesandUsesofCashSourcesofCash:UsesofCash:CashonBooks$40CashOfferperSH$24.00Short-TermInterestBearingDebt0NumberofSHshares9SeniorLong-TermDebt100$216SubordinatedDebt76$216C.BalanceSheetsBeforeAfterRecapRecapCash$50$10OtherCurrentAssets100100Long-TermAssets,Net120120TotalAssets$270$230Noninterest-BearingSTDebt$60$60Short-TermInterest-BearingDebt@10%1010SeniorLong-TermDebt@12%0100SubordinatedDebt@15%076Equity200-16TotalLiabilitiesandSHE$270$230D.OwnershipProportionsBeforeAfterTotalNumberofSharesOwnedByShareholders9(90%)9(56%)OwnedbyManagers1(10%)7(44%)1016E.InterestCoverageNetOperatingIncome(NOI)$30$30InterestExpense:Short-TermInterest-BearingDebt$1$1SeniorLong-TermDebt0.012.0SubordinatedDebt0.011.4$1$24NOI/InterestExpense30.01.2M-32