Obtain the Hutchison Whampoa Case from Harvard Business Publishing Coursepack. After reading the case, you are expected to submit a preliminary case analysis report (progress report) at the end of Module Five and a final case analysis report at the end of Module Ten. You are highly encouraged to utilize the Individual Case Analysis Questions forum to help you with this task. To help you with the analysis of this case, below are suggested questions for you to discuss on when analyzing it. Note that while these questions are helpful, your reports should not be written to answer these questions but to provide a full analysis of the case.
What kind of capital structure would you propose to Hutchison Whampoa in light of its future needs and why?
What bond rating do you think Hutchison Whampoa will be able to obtain from Standard and Poor’s?
What are the debt financing options? Why you are for/against the Yankee bond option?
Assume Hutchison Whampoa will require $1 million USD of financing in 1996. Assume that new equity can be raised at $48.8 a share and that a long-term debt issue will carry an interest cost of HIBOR plus 70 basis points (bps). How would an equity or debt issue impact Hutchison’s financial position and performance?