Diageo plc (201-033)

Chacko, George, Tufano, Peter and Musher, Joshua (2001) Diageo plc (201-033). [Case]

Abstract

A major U.K.-based multinational is reevaluating its leverage policy as it restructures its business. The treasury team models the tradeoffs between the benefits and costs of debt financing, using Monte Carlo simulation to estimate the savings from the interest tax shields and expected financial distress costs under several sets of leverage policies. The group treasurer (CFO) must decide whether and how the simulation results should be incorporated into a recommendation to the board of directors and, more generally, what recommendation to make regarding the firm's leverage policy.

Item Type: Case
Keywords: finance, accounting, analytics
Subject(s): Finance
Date Deposited: 05 Apr 2016 15:48
Last Modified: 12 Apr 2016 15:25
Funders: n/a
URI: http://eureka.sbs.ox.ac.uk/id/eprint/6015

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