American Home Products Capital Structure Case Study.

... From: Team Delta American Home Products Capital Structure Case Study Introduction American Home Products is a corporation involved in the production and marketing of over 1,500 consumer goods allocated among four distinct lines of business comprised of prescription drugs, packaged drugs, food products, housewares and household products. While the corporation does not invest heavily into the research and development of new lines of business, its success is a result of its ability to aggressively market the products it manufactures, especially the company's line of prescriptin drugs. American Home Products is a company with virtually no debt and an impressive amount of cash on its balance sheet. Under its current leadership, CEO William F. Laporte maintains an extremely conservative capital structure. During his 17 year tenure, Laporte's brand of centralized micro-management created a company with a clean, low-debt balance sheet; cash reserves equal to 40% of its net worth (Total Assets less Total

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