MCI Communications Corp.: Capital Structure Theory (B) Harvard Case Solution & Analysis

After five months of a reasonably relaxed work schedule, Katzu Mizuno found himself wrapped up in an evaluation that was excessive. The caller was Anna Curti, his boss. The subject was a long time customer, MCI. The board of directors had recently discussed repurchasing shares in order to bolster shareholder value. But cash was tight. The business would have to use debt financing to furnish the cash if MCI meant to execute a stock repurchase plan within the next six months. Even though the recent debt-to-equity ratio of 40% was contentiously lower than the industry average and MCI had extra debt capacity, the decision was far from straightforward. MCI had contacted Lynch to provide an analysis and recommendation regarding the proposed debt problem and stock repurchase.

MCI Communications Corp Capital Structure Theory (B) Case Study Solution

Curti needed to respond immediately, which gave little time to Mizuno. The board intended to reveal the particulars of its strategy to improve shareholder value by the end of the subsequent week. Any recommendation and accompanying evaluation would be scrutinized. The heat was definitely on. As Mizuno labored to finish and refine the investigation in front of him, heavy on his head was how he would relay his findings to Curti. Resources and what advice would she need in order to counsel the client on whether to move forward with the plan?

PUBLICATION DATE: November 14, 2007 PRODUCT #: UV0821-PDF-ENG

This is just an excerpt. This case is aboutĀ FINANCE & ACCOUNTING

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