Case: Hill Country Snack Foods Co.

You may use the following question to guide your analysis:

What changes should Hill Country Snack Foods make to its capital structure, if any? In comparing the three options provided and the status quo, employ the following criteria:

The cost of capital,

earnings per share and share price (assuming the P/E ratio remains the same),

risk to the firm from the added leverage,

market timing,

financial flexibility, and

the company culture of cautiousness.

Notes and hints:
· Do the calculations in Excel. Print your spreadsheet carefully and attach as an exhibit(s).

Submit your report in hard copy. The page limit on the write-up is 3 pages. You may add as many exhibits as you deem appropriate. Manage the printout of your spreadsheets using ranges, print settings, printer properties and page setup so the worksheet is not spread out over multiple pages, but the font size is still readable. The text of the report should be Times Roman, 12-point font with 1" margins.

A review of the background information is not necessary. No pages over the limit will be read, so make every sentence count!!! Assumptions should be stated as footnotes in the exhibits. The exhibits cannot present any new arguments and all must be referenced in the write-up.

Attachment:- 913517_pcs.pdf