Homework
Objective
To illustrate the benefits and costs of debt, causes and consequences of financial distress, and basic restructuring alternatives.
Synopsis
A publicly traded funeral home and cemetery consolidator faces imminent financial distress. The company has grown aggressively through the use of debt. Restructuring the debt is potentially very costly to creditors, shareholders, suppliers, and other corporate stakeholders.
Task
a. How was the Loewen Group able to grow explosively for the first half of the 1990s? What were the advantages of debt financing enjoyed by the firm in this phase?
b. How did Loewen get to the position it found itself in 1999?
c. Why do you think SCI was willing to offer Loewen such a substantial premium? What incremental cash flows might SCI expect that could explain this premium? - THIS ON NEEDS AN ANSWER
d. Some might describe Loewen as "financially distressed." Is this a fair description of its problem? What are the manifestations and apparent costs of this so-called financial distress?
e. What are Loewen's alternatives? What would you recommend to John Lacey?
Format your homework according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.
Attachment:- The-Loewen-Group.rar