個案總覽

Spreadsheet for case UV0259

In February 1994, the senior management team at Continental Cablevision received the final joint-venture agreement from Fintelco, a potential partner in Argentina. The tasks for the student are to review the terms of the agreement, the outlook for the Argentine economy, and the corporate cultures at both companies to decide whether Continental should sign the agreement.

Spreadsheet for case UV2404

Puts the student in the shoes of the recently appointed treasurer of Polaroid Corporation, who must consider several matters concerning the firm's debt policy. An immediate concern is the company's outstanding $150 million 7.25% notes, due to mature in several months. Although investment bankers interested in doing business with Polaroid have been trying to present proposals for refunding the issue, the new treasurer believes that any refunding decision should be part of a larger review of the firm's financial policies. Accordingly, he has undertaken a review of the firm's overall debt policy, focusing primarily on the mix of debt and equity and on the maturity structure of the debt. Asks students to consider how much flexibility Polaroid's business will require in future years and to pick a target debt ratio that provides the necessary flexibility. Students must evaluate, in addition to internal demands for funds, the role of bond ratings and investment-grade status in maintaining ongoing access to capital markets.

In January 1996, the chief financial officer must fashion a response to a raider who claims that a major business segment of the company should be sold because it is not earning a satisfactory rate of return (ROR). The case recounts the debate within the company over the use of a single hurdle rate to evaluate all segments of the company versus a risk-adjusted hurdle rate system. The students' tasks are to resolve the debate, estimate weighted-average costs of capital (WACC) for the two business segments, and respond to the raider. Because the case was prepared to serve as part of an introduction to estimating investors' required rates of return, it would best follow one or two class sessions introducing techniques for estimating WACC. Although the numerical calculations required are light, some of the subtleties about the use of risk-adjusted hurdle rates will require time for the novice to absorb. The case can be used to pursue a variety of teaching objectives, including (1) extending risk return (i.e., mean variance) analysis to corporate finance; (2) surveying classic arguments for and against the use of risk-adjusted hurdle rate systems; (3) assessing the assumptions and limitations of risk-adjusted hurdle rate systems; (4) exercising the estimation of segment WACCs; and (5) considering possible organizational barriers to the implementation of risk-adjusted hurdle rates.

The case presents financial ratios for eight pairs of unidentified companies and asked to mate the description of the company with the financial profile apparent in the ratios. It provides a foundation for student discussion of financial ratios and the insights that may be gained through their use. Classroom discussion of the students' attempts to match results and companies reveals the strong influence of both industry and corporate strategy on the financial results and ratios for firms.

Students must estimate the weighted-average cost of capital (WACC) for two business segments and resolve the debate within a company over the use of a single hurdle rate versus a risk-adjusted hurdle rate performance evaluation system. In January 1996, Phon-Tech's CFO must fashion a recommendation regarding the company's use of segment hurdle rates. Phon-Tech had been the target of an active investor who charged that one segment was not paying its way. The case serves as part of an introduction to estimating investors' required rates of return (ROR). It would best following one or two class sessions introducing techniques for estimating WACC. Although the numerical calculations required are light, some of the subtleties about the use of risk-adjusted hurdle rates will require time for the novice to absorb.

Set in August 1995, enables students to assess Berkshire Hathaway's bid for the 49.6% of GEICO Corporation that it does not already own. Students perform a simple valuation of GEICO shares and consider the reasonableness of the 26% acquisition premium. There are no obvious synergies, and Berkshire Hathaway has announced that it will run GEICO with no changes. Student analysis can include the investment philosophy and remarkable record of Berkshire's CEO, Warren E. Buffett.

Set in 1994, this case concerns a subsidiary of Westmoreland Coal that is considering whether to proceed alone as the international partner and developer of a coal-fired electric power plant in Zhangze, China. The domestic partner, the government's electric power agency, has proposed a build-operate-transfer (BOT) project financing in which Westmoreland Energy (WEI) would receive returns over 20 years and then exit. The internal rate of return on the project appears to exceed the CEO's target rate, though the project developer, Dorothy Hampton, is concerned about a variety of risks and the appropriateness of the target hurdle rate. The tasks for the student are to evaluate the risks, estimate a target rate of return, exercise the valuation model (which is given in the case), and recommend any changes in the deal structure that can help WEI achieve its goals. The objectives of the case are to (1) exercise students' capabilities in analyzing a complex investment-financing transaction from the standpoints of various project participants (the key tasks are risk analysis and valuation), (2) illustrate the financial effects of debt leverage and equity leverage (the focus of attention is on the creation of value and its sources, risk shifting, and wealth transfers), and (3) assess the characteristics and challenges of project financings and development projects in emerging economies.

Set in January 1994, this case concerns a discussion between a money manager and her assistant about approaches for analyzing an offering of convertible bonds by Boston Chicken. The analysis compares the insights available from standard descriptive ratios with those available from valuation analysis. The case is intended to be a student's first exercise in analyzing convertible bonds, and it assumes some familiarity with option-pricing theory and bond valuation. The format of the case (clear tasks and conversational style) is intended to disarm the novice. Nevertheless, the case raises many important and interesting points that will easily fill a class period.

This case explains the plan of the Equitable Companies to sell a 20 percent interest in Donaldson, Lufkin & Jenrette (DLJ) via an equity carve-out in an initial public offering (IPO), and presents students the task of pricing DLJ's shares in the IPO. The company approached the pricing task using the method of comparable multiples. The case gives ample information on valuation multiples of peer firms. A key point of assessment is to choose which industry segment DLJ competes in so that an appropriate multiple may be chosen. The case also describes the equity-underwriting process in detail. It presents a rich range of industry information, affording an opportunity to discuss forces of change in the investment-banking industry. The teaching note explains how the case may be used to explore the trade-off between maximizing the offering price and supporting the trading of shares in the aftermarket. This case is an abridgement of the A (F-1145) and B (F-1146) cases, which may be taught alone or together. Taught together, they would ordinarily require two class periods. The instructor may cover the general subject matter of the A and B cases by using this abridged version.

In January 1996, an investment manager of a hedge fund is considering purchasing an equity interest in a start-up biotechnology firm, Rocky Mountain Advanced Genome (RMAG). The asking price is $46 million for a 90% equity interest. Although managers of the firm are optimistic about its future performance, the investment manager is more conservative in her expectations. She asks an analyst to fashion a counterproposal for RMAG's management. The tasks for students are to apply the concept of terminal value, interpret completed analyses and data, and derive implications of different terminal-value assumptions in an effort to recommend a counterproposal. Little computation is required of the students.

Allows students to observe two competing businesses transform themselves over time. By following the competitive actions and reactions over more than 10 years, students gain an appreciation of how rivals raise the competitive ante, search for new ways to add customer value, and come to realize that sustaining a competitive advantage is difficult.

Students assess the performance of the Magellan fund, consider the sources of that success, and to decide on its sustainability. Designed for beginning finance courses, the case requires no numerical calculations to perform the analysis; but the absorption of capital market background and the implications of finance concepts in the case will fully occupy the novice. Set in fall 1995, the case describes the investment styles of three of the fund's managers-Peter Lynch, Morris Smith, and the current manager, Jeffrey Vinik.

In July 1995, J.C. Penney announced the award to United Parcel Service (UPS) of a billion-dollar, five-year contract for delivery services. This was the largest distribution contract ever awarded and represented a dramatic concentration of Penney's business with one carrier. Invites students to assess the financial performance of Federal Express and UPS. The two firms have competed intensely for dominance of the overnight express package industry. Requires no numerical computations of the students; rather, their tasks include interpretation of the results and reflection on the result's implications.

Set in July 1995, this case invites students to assess the financial performance of Federal Express and United Parcel Service, two close competitors in the U.S. overnight express package-delivery industry. Although the case requires no numerical computations, it does ask students to interpret results and reflect on the implications. The contrasting financial records of the two firms afford a platform for exploring several important issues, including (1) the definition and use of "economic value added" (EVA) as a measure of corporate performance; (2) a comparison of EVA with other classic approaches of historical performance analysis; (3) the exercise of skills in business-segment analysis; (4) the exploration of the financial implications of intense competition and corporate transformation; and (5) the definition of "excellence" from a corporate-finance point of view.

Set in 1993, this series of cases (A, B, C, D, and B [Abridged]) concerns the strategic alliance between the automotive businesses of AB Volvo, the largest industrial group in Scandinavia, and Renault S.A., the largest enterprise in France. This alliance was one of the most prominent failures of multinational business integration seen in recent years. The aim of this series is to explore three broad themes: strategic alliances, leadership of corporate transformation, and governance and investor relations. The A case reviews the original formation of the strategic alliance in 1990 and its status as of March 1993, when the probability of Renault's privatization increased. The tasks for the student in the A case are to assess the origins and current health of the strategic alliance and to recommend responses to the impending privatization of Renault.