1. What risk presents American Home Products? What is the financial risk of AHP for each debt level proposed in annex 3? How much value could AHP generate for its shareholders at each proposed level of indebtedness?
2. What capital structure for AHP I recommend? What are the advantages of indebtedness of the company? What are the disadvantages? How would it affect the tax debt of the company? How would they react markets the decision to increase debt in the financial structure of the company?
3. How AHP structure could implement a more aggressive capital? What are the alternative methods of increasing debt?
4. In view of the corporate culture of AHP What arguments would you use to persuade Mr. Laporte or his successor to adopt its recommendations?
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