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Spreadsheet supplement for case number 283065.

Spreadsheet supplement for case number 284066.

Spreadsheet supplement for case number 280103.

Disequilibrium in the $350 million TiO2 market has prompted Du Pont's Pigments Department to develop two strategies for competing in this market in the future. The growth strategy has a smaller internal rate of return than the alternative strategy due to large capital outlays in early years and positive cash flows arising only in later years. However, it is the more valuable project on a net present value basis for all discount rates less than 21%. Students are faced with the task of converting strategic plans and objectives into free cash flow projections and determining a breakeven discount rate between these mutually exclusive projects. A decision about which strategy to pursue must then be made. Rewritten version of an earlier case by the same author.

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.

Demonstrates the interaction of product market and capital market goals.

The capital asset pricing model (CAPM) is a theoretical representation of the way financial markets behave. It can be used to estimate a company's cost of equity capital in investment management decisions. Managers can also use CAPM to calculate divisional hurdle rates and risks of acquisitions. CAPM is based on specialized assumptions including frictionless markets without imperfections, such as transaction costs, taxes and restrictions on borrowing and short selling. It requires limiting assumptions concerning the statistical nature of securities' returns and investors' preferences, and it assumes investors' agreements on likely performance and risk of securities.

Describes the development and terms of the largest leveraged buyout up to the date of the case. The main problem is to value the positions of the various participants: lenders, equity holders, investment bankers, and management.

A bank lending officer must decide whether to extend and increase a loan to a small machine tool company. Case provides sufficient data for preparation of cash budgets and pro forma financial statements in order to analyze the lending officer's problem. Other issues that can be addressed include the impact of stock repurchase, dividends, advanced payments by customers, as well as general sensitivity analysis.

Demonstrates how the capital asset pricing model can be used to estimate the impact of financial leverage on the cost of equity capital. The levering and unlevering of betas are illustrated. Also presents a methodology for decomposing the cost of equity into its three components--the risk-free rate, a premium for business, and a premium for financial risk.

Describes in nonmathematical terms the nature of capital asset pricing model and possible use in estimating a company's cost of equity capital.

Describes the FCC hearings which were designed to determine Comsat's cost of equity. Comsat's risks are examined, and expert testimony is given. Objective of the case is to estimate Comsat's cost of equity.

Spreadsheet supplement to case 276183.

Spreadsheet Supplement for case 276195

Financial vice president is expected to prepare a financing plan for Bio-Tech matching the most recent long-range plans of three operating groups. The latter, however, must be adjusted to take account of recommendations to be made on plant investment of one product group and possible sale of a major division.

Spreadsheet Supplement for case 275124