個案總覽

Spreadsheet Supplement for KEL744

A wealth management company in Chile that provided financial advisory services to high net worth individuals and pension funds was at a crossroads. After 15 years in business, the company had become very successful. To increase its value without incurring undue corporate financial risk, the owner, who has invested most of his personal wealth in the company, has the opportunity to make an investment in a similar wealth management company in Columbia. What are the risks and rewards of such a complex international merger and acquisition for this medium-sized enterprise operating in an uncertain political and economic environment?

At the end of 2011, one of the largest food retailers in Brazil, Grupo Pão de Açúcar, or GPA (a subsidiary of Companhia Brasileira De Distribuição, or CBD), was reviewing its accounts payable terms with suppliers in search of additional value. Manager of analytics Maria Cristina Santos was examining the trade credit terms GPA had with Oalem Ltda, a family-owned melon grower located in northeastern Brazil. Oalem, like most small family businesses, was financed with bank loans and equity that was held predominantly by the family. The case examines how accounts payable (trade credit) terms should be set or negotiated between a large retailer and a small supplier, especially when the bargaining power between the two may not be equal. The case demonstrates that trade credit terms can be as important as the terms of more traditional forms of financing.

"A midsize community hospital must choose a strategy to compete with an expanding regional rival. The strategy, focused on acquiring patient volume, includes expanding investment into integrated care, setting the reimbursement structure for revenue collection, and moving to a capitation-based payment system. The case presents an evaluation of revenue models to select that which best supports a given business strategy. This case is designed to introduce a health care audience to financial analysis. It provides a straightforward introduction to hospital financial-statement ratio analysis and hospital operating statistics, so it can also serve to introduce any audience with a business or medical background to hospital finance."

Spreadsheet Supplement for UV6677

Judy and John DeRight, looking to diversify their investment portfolios, have retained Angus Cartwright, Jr. to identify prospective real estate acquisitions. Mr. Cartwright has four potential properties that he feels merit an in-depth financial analysis. The case provides an opportunity to examine the various components of real estate return--cash flow, tax benefits, and futures--and measure the profitability of a proposed investment through the calculation of net present value, internal rate of return, and capitalization rate.

This case asks the student to take a stance on whether an portfolio manager should take a long or short position in the equity of Universal Display Corporation (PANL). The stock is polarizing, in that reasonable arguments could be made for both long and short positions. The case suggests a number of steps that an analyst might follow when valuing a company

Spreadsheet Supplement for KEL716

Victor Alexander was intrigued by the packet of papers that lay in front of him. The papers comprised a brochure that Garden State Bank had put together in an effort to sell the Bonnie Road Distribution Center in Somerset, New Jersey, for $9.7 million. It was April 2013 and the New Jersey real estate market was recovering and the capital markets were in disarray. Alexander had convinced 10 friends to put up $200,000 each in addition to his own $200,000 to acquire one or two troubled properties. Alexander decided to focus on warehouse properties due to their relatively small size, their strong historical performance, and his relevant experience. He wondered whether Bonnie Road would make a good investment.

Though it had wiped out billions of dollars of debt "Houdini-style" in the past, in 2008 the future of Caesars Entertainment Corporation was uncertain. This case presents students with the company's complex financial circumstances and an overview of the industry in which it competes, as seen through the lens of an associate at a credit hedge fund. Charged by the firm's senior portfolio manager with assessing an investment in the debt securities of Caesars Entertainment Corporation, the associate is asked to analyze the terms of a proposed leveraged buy-out.

In January 2007, Gary Wendlandt was concerned about the US economy. As Chief Investment Officer of the New York Life Insurance Company (NYLIC), he was responsible for managing a $147 billion investment portfolio. The US housing market was weakening at a time when financial institutions had significant assets tied up in mortgage-backed securities and collateralized debt obligations. Credit risk spreads were narrowing despite a general easing of underwriting standards. Wendlandt outlined his concerns in a memo to Ted Mathas, NYLIC's Chief Operating Officer. The question before Wendlandt and his investment management team was how to implement a "quality tilt" strategy. This would require placing more of NYLIC's new cash flows into safer fixed income products. NYLIC had a responsibility to its policyholders. It was management's duty to protect the longevity and financial strength of the firm, so that it could continue to pay policyholder claims, distribute payments from annuities, and issue dividends. Wendlandt faced a classic risk/return tradeoff - i.e., lower current interest income to avoid the higher potential risk of capital losses. How should he adjust NYLIC's investment portfolio?

Although inexperienced in real estate, Edward Alexander hopes in June 2013 that youthful enthusiasm and an $240,000 in savings and inheritance will help him enter the real estate business. His experience chronicles the process of finding, evaluating, and acquiring a four-unit brownstone in need of renovation in the Beacon Hill area of Boston. The case also identifies the various players in the process. A rewritten version of an earlier case

This note presents statistics on private equity exits and discusses important issues relating to the most common exits routes.

Amid worldwide market and economic uncertainty, Tesla debuted its stock in June 2010 on the NASDAQ Stock Market (Ticker Symbol: TSLA). The stock price jumped over 40 percent in its first day of trading to close at $23.89 in an upsized deal that valued the company at $2 billion and raised over $226 million. It was the first initial public offering by an American automaker since Ford's debut in 1956. While the primary market showed strong enthusiasm for the stock, the secondary market was much less convinced. Concerns were raised about the long-term viability of the company stemming from a limited operating history, a long history of losses, liquidity issues, unreliable consumer demand, expensive battery technology and competition from traditional automakers. As a result, the stock was frequently the subject of high short interest, a predictor of lower investment performance. The question plaguing investors was: were the short-sellers correct in their bearish sentiment, or was a short squeeze imminent? This case describes Tesla's road from founding to outsourced manufacturing of the Roadster, the first fully electric sports car, to in-house capacity production of the Model S, its highly regarded fully electric luxury sedan. Specifically, it focuses on the long-term viability of the growth company along with questions related to quality of earnings.

Spreadsheet supplement for case 213082.

This note provides an overview of Initial Public Offerings (IPOs) and addresses the methods used to value companies undergoing an IPO. It begins with a brief introduction to IPOs and the rationale behind going public, followed by an analysis of IPOs from the investor's perspective. Next, the IPO process is outlined and explained, including the underwriter choice, selling procedure, pricing and activities in the aftermarket. Lastly, the note examines the valuation methodology used in the pricing stage of IPOs. This includes the discounted cash flow method, the use of market multiples of comparable firms, as well as other situational considerations when determining the initial price per share range and final offering price.

In 2008, about the time when the Yunus Model of microfinancing was under attack in its home country of Bangladesh, the Yunan Model was begun in rural China. The original model suffered from inefficiencies, high interest rates and allegations of improprieties against the founder, Nobel Prize winner Muhammad Yunus. By contrast, the Yunan Model relied on social capital and mechanism design theory to enlist the rural population, financial institutions and government in a cooperative effort to increase the financial stability and entrepreneurship level of one of the poorest areas of the country. Could “microfinance with Chinese characteristics” offer a plan to reduce poverty across China?

When discovered in the 1990s, the Kashagan oil field was the second largest oil field in the world. The project sponsors (equity investors) signed a 40-year production sharing agreement (PSA) with the Kazakh government in 1997, with the expectation the field would be developed at a total cost of $57 billion and would be pumping oil by 2005. Unlike most contracts in the energy industry, the Kashagan agreement was a "flexible PSA" meaning the contractual terms-the allocation of risks and returns-depended on ex post realizations of such things as capital costs and profitability. The parties incorporated contingencies into the contract to make it fairer and more flexible, and to ensure it remain viable over the project's 40-year life. Due to a combination of problems and challenges, the project was still not done in mid-2007. At that time, the sponsors, led by the Italian energy company ENI, announced the project would not be completed until 2010 and the total cost was likely to be $136 billion. Although oil prices had risen dramatically between 1997 and 2007, thereby making the project worth considerably more, the Kazakh government indicated its desire to renegotiate key provisions of the contract. The sponsors had to decide whether to renegotiate the contract and, if so, which parts.

Rational, analytical, directed approaches for strategy creation and execution may work for creating value by conventional, hierarchically structured organizations operating in stable environments. However, when the basis of competition shifts from product features to an experience delivered by a network of independently acting participants in a complex and fast-evolving market environment, approaches based on command and control do not work. For order to emerge from such chaos and to gain more control over success, strategy based on reason alone is not enough to inspire action in others. To understand what it takes to effectively make strategy under such circumstances, this article shows how the UK's Royal Marines, in collaboration with more than a dozen different stakeholder groups, developed a novel adaptation of wargaming to affect strategic change in Afghanistan. It also demonstrates the broad applicability of this strategic approach.

This article illuminates the drivers of exponential improvements in performance and cost and explains why some technologies experience more rapid improvements than others. It shows how exponential improvements in performance and cost are largely driven by two mechanisms: creating materials to better exploit their physical phenomena; and geometric scaling. Improvements in some technologies are directly experienced through these two mechanisms, while improvements in higher-level "systems" are indirectly experienced through improvements in specific "components." Understanding these drivers can help us better recognize when new technologies might become economically feasible and thus create appropriate policies for promoting improvements.