Buyback of Bonds: The Best Option for Outback Steakhouse (Essay Sample)
Please review the attached file and answer the following question:
Assume that you can only choose one of the four options under consideration, please provide your recommendation which should include a supporting analysis of why that option is preferable to others.
Please review the attached file and answer the following question:
Assume that you can only choose one of the four options under consideration, please provide your recommendation which should include a supporting analysis of why that option is preferable to others.
Finance and Accounting
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The Best Option for Outback Steakhouse
Outback has reaped twenty years of success following the strategic agenda that was established by the company during its founding. However, the new economic climate challenged the company’s strategy. Bain capital’s investment in Outback was aimed at driving change as well as growth. The portfolio of Bain Capital, fortunately, identified more opportunities for value creation that the previous original case of underwriting, although the worse macroeconomic climate did not guarantee success to the portfolio. One of Bain Capital’s principal, David Humphrey, proposed four options that included hoarding cash, negotiation with the banks, the buying back of the bonds of the company, and reduction of costs (Gompers, Mugford & Kim, 2012). Out of the four options, however, the use of the company’s cash to buy back its bonds to minimize total debt is the best option that
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