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... level of expenses. All this combined with dividend growth of 222% between 1972 - 1981, contributed to the firm's AAA bond rating and to the popularity of AHP's stock among retail and, primarily, institutional investors. Laporte was repeatedly quoted to say, "We run this company for the shareholders." We are asked to analyze the company's debt policy and its current capital structure. There after, we are to make a recommendation to the CEO regarding modifications to its debt ratio or portion of capital contributed by debt so that the firm can affect a repurchase of a portion of its outstanding stock. The options available for selection are a preserved debt ratio of 30% or increased debt ratios of 50% and 70%. It is likely that adding debt to the capital structure would create some value for shareholders; however, Laporte is firmly against borrowing and is extremely risk-averse. In general, the lower ...