This case examines the issue of financial leverage at California Pizza Kitchen (CPK) in July 2007. With an aversion to debt and a highly lucrative business, CPK direction is contemplating a debt-financed stock buyback program.
cpk case solution
The case is meant to offer the notion of debt tax shields and an introduction to Modigliani and Miller capital structure insignificance propositions. With the backdrop of a pizza business, the case provide an engaging context to argue the "pizza graphs" that are broadly used in corporate finance curriculum to exemplify the wealth effects of capital structure choice.
PUBLICATION DATE: September 02, 2008 PRODUCT #: UV1203-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
Related Case Solutions & Analyses:
Corporate Governance Standards: Qatar Telecom Acquires Wataniya Telecom
Duckworth Asset Management Inc.
Primo Benzina AG
Aubrey McClendon’s Special Incentive Compensation at Chesapeake Energy (A)
Fiat’s Strategic Alliance with Tata
The Hedge Fund Industry
ProTech, Inc., Spanish Version
Milk and Money
Allston: Brand vs. Architecture, Chinese Version
Adelphia Communications Corp.’s Bankruptcy, Spanish Version
