Hutchison Whampoa Limited:  The Capital Structure Decision
Harvard Business School Case Study Solution
The Hutchison Whampoa Limited case study solution is made up of
2 files.  The first file is a MS Word file that is 2,623 words and
answers the following 6 questions.  

1.        Assume Hutchison Whampoa will require US$1 billion of
financing in 1996.  Assume that equity can be raised at $48.80 a
share and that a long-term debt issue will carry an interest rate of
HIBOR plus 70 basis points.  How would an equity or debt issue
impact Hutchison’s financial position and performance?

2.        Assess Hutchison Whampoa’s current capital structure
considering its future financial needs.

3.        What other considerations arise here?  How important is the
international aspect?

4.        What bond rating do you think Hutchison Whampoa will be
able to obtain from Standard and Poor’s?  Why?

5.        Compare the debt financing options.  Explain why you are
for/against the Yankee bond option.

6.        What kind of capital structure would you propose to Hutchison
Whampoa and why?
The second file is a MS Excel file that has the financial analysis needed for the case study solution.  

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