Case | HBS Case Collection | October 2012

Winfield Refuse Management, Inc.: Raising Debt vs. Equity

by W. Carl Kester and Sunru Yong


A small, publicly traded company specializing in non-hazardous waste management considers a major acquisition in the Midwestern U.S. The acquisition can provide entry into the region, help the firm compete in a competitive industry, and improve its cost position. The company has a long-standing policy to avoid long term debt and until now has made a series of small acquisitions using only internal financing. The chief financial officer wants the board of directors to reconsider the policy and suggests funding the acquisition through a bond issue. Several company directors disagree and prefer that the firm issue common stock. Students must analyze the costs of issuing either a bond or common stock before making a final recommendation for financing the acquisition.

Keywords: United States; Acquisitions; capital structure; Equity Capital; debt management; Expansion; leveraged buyouts; financial analysis; Administrative/Support/Waste Management/Remediation Services; Equity; Borrowing and Debt; Service Industry;


Kester, W. Carl, and Sunru Yong. "Winfield Refuse Management, Inc.: Raising Debt vs. Equity." Harvard Business School Brief Case 913-530, October 2012.