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Acting as management, students determine the effects of different degrees of leverage and review this company's current leverage in light of inherent industry risks and company goals.

This note discusses the relative strengths and weaknesses of three primary methods of valuing a firm: (1) accounting approaches (e.g., book value); (2) multiples of earnings (e.g., p/e); and (3) discounted cash flow and related models.

This case is set in the midst of the attempted takeover of Walt Disney Productions by the raider Saul Steinberg in June 1984. Disney's chief executive officer ponders whether to fight the takeover or to pay "greenmail." One significant influence on the decision is the "true" value of the firm. The case offers, either directly or through analysis of it, several estimates of value. The valuation question invites a review of Disney's past performance and current competitive position. Other significant influences on the decision are the ethics and economics of paying greenmail. The rich range of issues raised in the case (strategy, valuation, performance measurement, and ethics) makes it an effective first case, review case, or final exam in a corporate-finance course. A student worksheet file is available for use with this case

In the mid-1980s, Emerson Electric looked at possible two-year debt issues in three countries: the United States, Switzerland, and New Zealand. The $65 million to be raised is earmarked for general corporate expenses. Emerson has subsidiaries in 27 countries, including the three candidate countries. In this case, students act as Emerson's CFO and must evaluate the U.S., Swiss, and New Zealand economies to determine in which currency to secure the needed debt issues.

This negotiation case is meant to be used in conjunction with "Eli Lilly and Company" (F-0794); half the class works from one case and half from the other. Lilly is considering acquiring Hybritech, but the genetic-engineering company's future cash flows are difficult to predict and value. Both companies want to effect the merger, but the cases, which provide essentially the same information in all other respects, provide widely divergent projected cash flows. (The B case is F-0793.)

The financial analyst for this manufacturer of factory-automation equipment must recommend equipment lease terms to be proposed to a customer. Students must discount the lease payments and compare the net asset value and internal rate of return (IRR) of leasing with the borrow-and-buy alternative and with the lease terms of competitors.

In late 1990, this company faced a large external financing requirement and needed to reassess its traditional approaches to financing. The tasks for the student are to recommend financing tactics to be employed for the next two years and to make a general assessment of the firm's historical financing policy. Student and instructor Lotus worksheet files are available on computer diskettes for use with this case and teaching note.

Spreadsheet for case UV2118

Spreadsheet for case UV0241

Spreadsheet for case UV0070

This case introduces the valuation and comparison of capital investments as students evaluate eight projects' cash flows and rank them in terms of economic attractiveness using net present value (NPV), internal rate of return (IRR), return on investment (ROI), profitability index, and payback.

Acting as chief financial officer (CFO), students try to determine how Coleco can fend off creditors. Coleco is in default on its loans and is in a negative equity position.

This negotiation case is meant to be used in conjunction with "Hybritech, Incorporated (A)"; half the class works from one case and half from the other. Lilly is considering acquiring Hybritech, but the genetic-engineering company's future cash flows are difficult to predict and value. Both companies want to effect the merger, but the cases, which provide essentially the same information in all other respects, provide widely divergent projected cash flows. The "Hybritech, Incorporated (B)" case is the follow-up case dealing with the payment structure of the acquisition.

This technical note introduces students to terminology, essential concepts, and issues involved in practical application of the Black-Scholes option-pricing model. Concepts include put-call parity, payoff diagrams, the option pricing model, and the similarities between corporate securities and options.

Primarily an exercise in quantitative techniques-financial forecasting and simple equity valuation-this case also presents issues related to decision-making and judgments in forecasting, and handling ethical concerns. In February 1986, Alfin, an importer and marketer of perfumes, introduced a skin cream with certain purported medicinal qualities to reduce wrinkles. The product is considered a major breakthrough as an over-the-counter therapy and offers huge potential sales. Students must estimate Alfin's funding needs as a result of that growth, decide whether those needs should be financed with debt or equity, and determine the value of its common stock.

Presents common-sized financials for two companies, each of which is in a number of industries. The companies have different market niches, and students are asked to identify the companies from details provided. Also allows for financial comparisons among industries.

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.