Garmin - Finding an Optimal Capital Structure
The summer of 2019 was fast approaching and Douglas Boessen, Garmin's CFO, was adamant that he would not leave for vacation before dealing with the long-postponed review of the company's capital structure. Garmin did not have any long-term debt and Boessen thought that given the environment of low interest rates, the company would benefit from tapping the bond market. This case is designed to assess Garmin's capital structure and discuss whether the company should add debt to it.
Collection: IESE (España)
Ref: F-977-E
Format: PDF
Number of pages: 4
Publication Date: Nov 17, 2021
Language: English, Spanish
What material is included in this case:
Description
The summer of 2019 was fast approaching and Douglas Boessen, Garmin's CFO, was adamant that he would not leave for vacation before dealing with the long-postponed review of the company's capital structure. Garmin did not have any long-term debt and Boessen thought that given the environment of low interest rates, the company would benefit from tapping the bond market. This case is designed to assess Garmin's capital structure and discuss whether the company should add debt to it.
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Geographic Setting: Switzerland, United States
Industry Setting: Computing and Telecommunications
Learning Objective
Discussion of a company's optimal capital structure.
The information provided enables the calculation of the cost of equity and the cost of capital, given the cost of debt, at different levels of leverage, in order to determine Garmin?s optimal capital structure. The emphasis is on quantitative issues, but time may allow for a brief discussion of non-quantitative issues, such as the impact of flexibility.
The information provided enables the calculation of the cost of equity and the cost of capital, given the cost of debt, at different levels of leverage, in order to determine Garmin?s optimal capital structure. The emphasis is on quantitative issues, but time may allow for a brief discussion of non-quantitative issues, such as the impact of flexibility.
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"Garmin - Finding an Optimal Capital Structure"
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