Discussion Questions
- Outline the impact of the medium-term note issue of US$500 million and the stock buyback of US$2.5 billion on Brambles’ balance sheet and profit and loss statement assuming all else remains equal.
- How would the Gross Leverage Ratio (Total Debt/Total Assets), Net Leverage Ratio (Net Debt/Total Assets), Interest Cover Ratio and EPS change following the borrowing and stock buyback?
- What were the expected total tax savings (tax shield) from the combined borrowing and stock buyback transaction at the corporate statutory tax rate of 30%?
- In the absence of immediate investment opportunities, would you consider the stock repurchase a better option than keeping the IFCO sale proceed within the company? Explain your response.
