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Transfer pricing used by multinational corporations to lower its tax burden, thereby increasing its consolidated income, can have far-reaching implications for the stakeholders, as a fund manager for Saskhedge fund found out the hard way. A stock investment the manager had made in Cameco Corporation has dropped its value by 20 per cent. In addition, Canada Revenue Agency has initiated a law suit against the firm for alleged tax avoidance in relation to the company's transfer pricing practices with its Swiss subsidiary. The suit could result in an additional tax liability of $800 million to $850 million. The manager needs to explain to the investment board the implications of the lawsuit on the stock price and advise the board on whether the projected $800 to $850 million is a fair estimate.

Transfer pricing used by multinational corporations to lower its tax burden, thereby increasing its consolidated income, can have far-reaching implications for the stakeholders, as a fund manager for Saskhedge fund found out the hard way. A stock investment the manager had made in Cameco Corporation has dropped its value by 20 per cent. In addition, Canada Revenue Agency has initiated a law suit against the firm for alleged tax avoidance in relation to the company's transfer pricing practices with its Swiss subsidiary. The suit could result in an additional tax liability of $800 million to $850 million. The manager needs to explain to the investment board the implications of the lawsuit on the stock price and advise the board on whether the projected $800 to $850 million is a fair estimate.

The board of directors of Symantec Corporation asked a consultant for an independent opinion on an important financing decision. Symantec had been working with several investment banks on a plan to raise debt to repurchase common shares. The consultant found it to be an interesting financing plan; whereas repurchasing shares immediately would increase Symantec's financial leverage, converting the notes in the future would reduce leverage at a potentially significant dilutive cost to the firm's equity. More interestingly, the company negotiated with the investment banks to buy a call spread on its own stock, covering the same number of shares as would be issued to noteholders upon conversion. After reviewing the proposal, the consultant tried to understand the motivation behind the structure of the transaction. Why would Symantec choose to issue convertible bonds, and why would it intend to buy the call spread?

The board of directors of Symantec Corporation asked a consultant for an independent opinion on an important financing decision. Symantec had been working with several investment banks on a plan to raise debt to repurchase common shares. The consultant found it to be an interesting financing plan; whereas repurchasing shares immediately would increase Symantec's financial leverage, converting the notes in the future would reduce leverage at a potentially significant dilutive cost to the firm's equity. More interestingly, the company negotiated with the investment banks to buy a call spread on its own stock, covering the same number of shares as would be issued to noteholders upon conversion. After reviewing the proposal, the consultant tried to understand the motivation behind the structure of the transaction. Why would Symantec choose to issue convertible bonds, and why would it intend to buy the call spread?

Crown Investment Corporation (CIC) of Saskatchewan and its partners, Mosaic Corporation and CIBC, have decided to sell a fertilizer plant that they jointly own. Now, CIC and its associates have to come up with a value assessment and mode of sale. Using different valuation methodologies, students are to determine the plant's value.

Crown Investment Corporation (CIC) of Saskatchewan and its partners Mosaic Corporation and CIBC had decided to sell a fertilizer plant that they jointly owned. Now CIC and its associates had to come up with a value assessment and mode of sale.

In December 2009, about a year after it suffered a crisis when clients walked away from massive derivative losses, Gulf Bank’s new CEO is trying to change the governance and operation of Gulf Bank. This case focuses on a turnaround situation and provides students with insight into evolving corporate governance standards in Kuwait. After assessing the situation that the CEO faces, students have to decide what change he should pursue and how he should carry it out. From a broad industry governance perspective, students can examine the state of banking regulation and oversight in Kuwait and suggest ways that corporate governance can be strengthened.

The executive director of an independent charitable foundation is thinking about whether to hedge his foundation's U.S. dollar exposure given the large swings in the Canadian dollar-U.S. dollar exchange rate. For the past four years, the weakening U.S. dollar has contributed to underperformance in the foundation's portfolio relative to its peers.

The executive director of an independent charitable foundation is thinking about whether to hedge his foundation's U.S. dollar exposure given the large swings in the Canadian dollar-U.S. dollar exchange rate. For the past four years, the weakening U.S. dollar has contributed to underperformance in the foundation's portfolio relative to its peers.

Spreadsheet for product 9B05N011.

Spreadsheet for product 9B05N012.

Credit Default Swaps (CDS) are derivative instruments that allow investors protection against credit events such as downgrades of or defaults by single-name or a basket of obligors. Estimated by the Band of International Settlements to be at $32.6 trillion in December 2009, these instruments represent one of the largest and fastest growing financial product markets globally. This note is intended to introduce students to CDS, the pricing basics as well as the role in the 2008 subprime crisis.

Credit Default Swaps (CDS) are derivative instruments that allow investors protection against credit events such as downgrades of or defaults by single-name or a basket of obligors. Estimated by the Band of International Settlements to be at $32.6 trillion in December 2009, these instruments represent one of the largest and fastest growing financial product markets globally. This note is intended to introduce students to CDS, the pricing basics as well as the role in the 2008 subprime crisis.

Spreadsheet for product 9B08N003.

The Canada Pension Plan Investment Board (CPPIB) has put in place a strong governance structure to ensure that excess contributions (by Canadians) can be invested with a singular mandate - to maximize the rate of return without undue risk of loss. In September 2009, a private member's bill seeks to regulate Canadian government agencies' dealings with Canadian mining companies operating in developing countries. A senior manager at the CPPIB has been asked to help craft the CPPIB's response to the bill.

An analyst at an investment firm is considering an investment in Carmanah Technologies Corporation (Carmanah). Carmanah is a fast-growing player in the high-powered alternative energy products. Since 2007, when the new chief executive officer (CEO) took over, a turnaround effort has been in place at Carmanah. At $0.91 per share, Carmanah's shares were trading at just 23 per cent of their value in mid-2007. The analyst is scheduled to make a recommendation on Carmanah to his managing director in two days. He needs to get to work valuing the company on the basis of the information he has gathered.

The Canada Pension Plan Investment Board (CPPIB) is asked to provide an opinion about the risk and return characteristics of an all-equity portfolio. The CPPIB is analyzing the potential of investing in other asset classes because of the potential for increased returns over the long-run. The Canada Pension Plan's assets currently completely comprise federal and provincial bonds and short-term securities.

An analyst at an investment firm is considering an investment in Carmanah Technologies Corporation (Carmanah). Carmanah is a fast-growing player in the high-powered alternative energy products. Since 2007, when the new chief executive officer (CEO) took over, a turnaround effort has been in place at Carmanah. At $0.91 per share, Carmanah's shares were trading at just 23 per cent of their value in mid-2007. The analyst is scheduled to make a recommendation on Carmanah to his managing director in two days. He needs to get to work valuing the company on the basis of the information he has gathered.

This case provides students with a deeper understanding of commodity futures markets in general and natural gas markets in particular. It also provides an introduction to hedge funds and insight into the largest hedge fund collapse in history. Third, it introduces such concepts as liquidity risk, value-at-risk, spread trades and the use of derivatives. As of the case date, Amaranth had not publicly disclosed the positions that led to $6 billion in losses during the month of September 2006. The case was written using public information and provides key pieces of data to allow students to reverse engineer possible positions Amaranth may have held.

This case provides students with a deeper understanding of commodity futures markets in general and natural gas markets in particular. It also provides an introduction to hedge funds and insight into the largest hedge fund collapse in history. Third, it introduces such concepts as liquidity risk, value-at-risk, spread trades and the use of derivatives. As of the case date, Amaranth had not publicly disclosed the positions that led to $6 billion in losses during the month of September 2006. The case was written using public information and provides key pieces of data to allow students to reverse engineer possible positions Amaranth may have held.