You are required to analyse Case The Wm. Wrigley Jr. Company. On October 2008, Wm. Wrigley Jr. Company (NYSE:

You are required to analyse Case The Wm. Wrigley Jr. Company. On October 2008, Wm. Wrigley Jr. Company (NYSE: WWY) completed its merger with Mars Incorporated, in a transaction valued at over $23 billion. The company was consequently delisted from the exchange.In June 2002, Blanka Dobrynin, managing director of an active hedge fund, was considering the possible gains from increasing a $3billion debt capitalization of the Wm. Wrigley Jr. Company. It is your task to critically analyse and report whether Wrigley should pursue this recapitalization proposal.Question #1:Looking at the data provided to you in the case, without doing a detailed analysis, do you agree with Blanka Dobrynin’s view that Wrigley is not efficiently financed? Why? Discuss clearly the methods you will use to help you to arrive at your decision.Question #2: What could possibly be the benefits of having more debt for Wrigley? You must refer to the literature to support your answer. Question #3:What could possibly be the costs of having more debt for Wrigley? You must refer to the literature to support your answer. Question #4: :What would you expect to happen to Wrigley’s WACC if it issued $3 billion in debt and used the proceeds to pay a dividend or repurchases? You must refer to the literature to support your answer.

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