American Home Products Corporation

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Case

Reference no. 9-283-065

Subject category: Finance, Accounting and Control

Authors: D Mullins Jr (Harvard Business School)

Published by: Harvard Business Publishing

Originally published in: 1983

Version: 24 January 1989

Length: 7 pages

Data source: Published sources

Topics: Capital structure; Debt management; Financial strategy; Value creation

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Abstract

American Home Products is a company with virtually no debt. Students are asked to analyze the company's debt policy and make a recommendation to the CEO. It is likely that adding debt to the capital structure would create some value for shareholders, the CEO is firmly against borrowing.

Location:

New York

Industry:

Pharmaceuticals

Size:

USD4.1 billion sales

Other setting(s):

1981