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Case | HBS Case Collection | November 1990 (Revised June 1993)

FMC Corp.: A Recapitalization

by William J. Bruns Jr. and Julie H. Hertenstein

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Abstract

A proposed recapitalization will use new debt to pay a large dividend to some shareholders in return for a reduction of their voting power. The result will be a highly leveraged financial structure and negative owners' equity. Students can trace the effects of proposed borrowing and payouts. Provides a forum for discussing leverage and its uses and the meaning of negative owners' equity.

Keywords: Financial Statements; Financial Strategy; Asset Management; Financial Management; Business Conglomerates; Borrowing and Debt; Business and Shareholder Relations; Capital Structure; Equity; Private Equity; Chemical Industry;

Format: Print 10 pages Find at Harvard

Citation:

Bruns, William J., Jr., and Julie H. Hertenstein. "FMC Corp.: A Recapitalization." Harvard Business School Case 191-084, November 1990. (Revised June 1993.)

Related Work

  1. Case | HBS Case Collection | January 1994

    FMC Corporation: A Recapitalization (Abridged), Part I

    William J. Bruns Jr. and Julie H. Hertenstein

    Keywords: Capital; Financing and Loans; Strategy;

    Citation:

    Bruns, William J., Jr., and Julie H. Hertenstein. "FMC Corporation: A Recapitalization (Abridged), Part I." Harvard Business School Case 194-075, January 1994.  View Details
    CiteView DetailsFind at Harvard Related
  2. Supplement | HBS Case Collection | January 1994

    FMC Corp.: A Recapitalization (Abridged), Part II

    William J. Bruns Jr. and Julie H. Hertenstein

    Keywords: Capital;

    Citation:

    Bruns, William J., Jr., and Julie H. Hertenstein. "FMC Corp.: A Recapitalization (Abridged), Part II." Harvard Business School Supplement 194-076, January 1994.  View Details
    CiteView DetailsFind at Harvard Related

About the Author

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William J. Bruns
Henry R. Byers Professor of Business Administration, Emeritus

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More from the Author

  • Supplement | HBS Case Collection | June 2016 (Revised December 2016)

    Survey Masters LLC (B)

    William J. Bruns, Amit Eynan and Kip Krumwiede

    Citation:

    Bruns, William J., Amit Eynan, and Kip Krumwiede. "Survey Masters LLC (B)." Harvard Business School Supplement 916-407, June 2016. (Revised December 2016.)  View Details
    CiteView DetailsPurchase Related
  • Teaching Note | HBS Case Collection | June 2016

    Survey Masters LLC (A) and (B)

    William J. Bruns, Amit Eynan and Kip Krumwiede

    Teaching Note for cases 107-061 and 916-407.

    Citation:

    Bruns, William J., Amit Eynan, and Kip Krumwiede. "Survey Masters LLC (A) and (B)." Harvard Business School Teaching Note 916-408, June 2016.  View Details
    CiteView DetailsPurchase Related
  • Case | HBS Case Collection | March 2007 (Revised August 2014)

    Survey Masters LLC (A)

    William J. Bruns

    Partners in a service firm are reviewing results for 2006, wondering whether large or small projects are more profitable. Present reports make small projects look more profitable. However, activity-based accounting reveals that large projects are more profitable and that concentrating sales efforts on large projects offers potential for greater profit in a service firm.

    Keywords: Activity Based Costing and Management; Financial Reporting; Cost vs Benefits; Financial Strategy; Service Industry;

    Citation:

    Bruns, William J. "Survey Masters LLC (A)." Harvard Business School Case 107-061, March 2007. (Revised August 2014.)  View Details
    CiteView DetailsEducatorsPurchase Related
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