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This case describes the execution of an urban public transportation project through a public private partnership (PPP). Delhi Metro Rail Corporation (DMRC) was a corporate body created by the Indian government and the government of National Capital Territory of Delhi for implementing a mass rapid transit system (MRTS) in Delhi. DMRC successfully completed phase I of the MRTS in 2006 and the government mandated that DMRC implement phase II of the MRTS project. The Japanese Bank of International Cooperation (JBIC) provided soft loans for both phases of the project. Meanwhile, the city of Delhi got the mandate to host the XIX Commonwealth Games 2010. As part of the preparations for these games, linking New Delhi Railway Station with Indira Gandhi International Airport through a metro system — Airport Express Metro Link (AEML) — became necessary for easing traffic congestion in the city. The timeline available for the AEML project was less than three years. At the same time, JBIC financial assistance was not available for this project. <br><br><br><br>Dr. Sreedharan, managing director of DMRC, was thus facing the challenges of project financing and its timely delivery. In the past in India, the PPP model of infrastructure development had emerged as dominant. The case discusses various options available to DMRC for project financing and timely completion of the AEML project under the PPP mode.

In this note, several measures to evaluate the performance of a mutual fund are discussed, including Sharpe Ratio, Treynor Ratio, Jensen’s Measure, and Modigliani’s Measure. It is well known that investors can increase expected returns by assuming higher risk, and hence performance measures must incorporate the concept of risk.

Molly Miller, an Intel employee and shareholder, must decide whether to vote FOR or AGAINST Intel's proposed 2009 option exchange program. Given recent declines in Intel's stock price, more than 99% of Intel's outstanding employee stock options are "underwater," and employee motivation and retention are serious concerns. If the program is approved by shareholders, Molly must decide whether to participate in the program and tender her underwater employee stock options. As a shareholder and an employee, Molly must assess the pros and cons of Intel's proposed exchange program from both perspectives. In addition, she must consider Intel's proposal in light of the alternative approaches pursued by other corporations that have recently confronted the problem of underwater employee stock options.

Spreadsheet supplement for case 212-035

The OpenTable case describes the company's evolution from its startup phase in 1998 to its decision to go public ten years later. The company transitioned through three CEOs until it hired Jeff Jordan, former head of PayPal and general manager of eBay North America, to help take the company public. The case describes the various factors a company must consider when going public, including the company's long-term potential, the fiduciary responsibility to investors, the regulations associated with Sarbanes-Oxley, the time and energy required of the management team and financial staff to meet regulators' and investors' needs as a public company, and the obvious financial and branding benefits, among others. OpenTable has just selected Merrill Lynch as its lead bank when the U.S. financial markets collapse virtually collapse overnight in the fall of 2008, creating a decision point for the management team and board to either continue forward with the process or wait an indefinite amount of time until the economy gains more stability.

Pacific Grove Spice Company is a profitable, rapidly growing manufacturer, marketer, and distributor of quality spices and seasonings. The company's business model requires significant investment in accounts receivable, inventory, and fixed assets to support sales. Although the company is profitable and all of its net income is reinvested in the firm, the firm must utilize significant amounts of debt to fund the necessary growth in assets to support sales. The bank is concerned about the total amount of interest-bearing debt on Pacific's balance sheet and has asked the company to provide a plan to reduce it. Debra Peterson, president and CEO, believes the current four-year financial projections are reasonable and attainable. She is also considering three opportunities: sponsoring a cable cooking show, raising new capital by selling shares of common stock, and acquiring a privately owned spice company. Students must analyze the company's financial projections to determine if the reduction in debt meets the bank's requirements. They must also analyze the opportunities and consider their individual and combined impacts on the company's financial position. The case illustrates the interaction between investment and financing decisions. This multifaceted case can be taught in a single class session or extended over several sessions and can be used as a final exam for an introductory MBA-level Finance course.

Spreadsheet Supplement for Product # 4366.

Ten years into Quadriserv's life, Greg DePetris and his company were at a crossroads. Perhaps more so than any of Greg's previous ventures, Quadriserv represented a move into an established marketplace with strong and entrenched incumbents. Greg had a tested record of startups in the trading and financial sectors, but the difference in this case was that Quadriserv would be taking on some of the oldest and most venerable firms in U.S. finance. Quadriserv's goal was a bold one: to revolutionize the equity securities lending market. While the potential payoff was large, the downside risk was not lost on Greg and the firm's other principals. Further, the current moment represented an important decision point for the firm.

This case focuses on the complexities of building a real estate portfolio in two low-income neighborhoods of Chicago, Roseland and Englewood, during the foreclosure crises in 2011.

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.

Cosmetics company L'Occitane en Provence must decide if it is the right time to go public, and, if so, where to list. The firm could list on Euronext in Paris, close to the firm's headquarters in southern France, on one of the large exchanges in the United States, or perhaps in Asia, where much of the firm's future growth is expected. The case provides opportunities to discuss the benefits and costs of going public, including valuation implications, and illustrates the choices faced by a prospective public firm that operates in a global setting.

Susan Johnson, founder and CEO of Medfield Pharmaceuticals, is faced with conflicting recommendations for extending the patent life of the company's flagship product, Fleximat, scheduled to go off patent in two years. With only three other products in Medfield's lineup of medications, one of which has only just received U.S. Food and Drug Administration approval, strategic management of the company's product pipeline is of paramount importance. But a recent $750 million offer to purchase the company has entirely shifted her focus. With this offer, Johnson has the opportunity to exit the business on a high note. Before making her recommendation, Johnson has to determine the value of the company, with a careful review of its existing and potential future products. But this is more than simply a financial decision, since Johnson-and Medfield employees in general-believe that the company is engaged in critically important work. This case is meant for undergraduate, MBA, executive education, and MBA exec audiences. It is taught as a core course, "Financial Management and Policies," at the Darden Graduate School of Business Administration.

Spreadsheet supplement to case UV5632.

This note introduces the concept of risk or merger arbitrage. Risk arbitrage is an investing method that attempts to capitalize on announced transactions pertaining to mergers, spin-offs, takeovers, liquidations, and corporate restructuring. The arbitrageur attempts to create riskless profit by simultaneous purchases and/or sales of assets that are part of an announced transaction. In the note, we outline the basics types of deals — including cash mergers, stock mergers, cash-stock deals and embedded options — and the methods to evaluate their profitability. The note also provides information on using Bloomberg’s mergers and acquisitions database and the Bloomberg M&A Analysis function to track pending transactions in the early and mid-2000s.

A hedge fund is deciding whether to liquidate its position in Apollo Group, a for-profit education firm, in light of significant political and macro-economic uncertainty facing the industry. As part of the investment analysis a complete discounted cash flow analysis must be performed.

Spreadsheet supplement to case 208-064.

China Life must decide whether to accept the government's "invitation" to develop a microinsurance product for the rural poor. Can it be done profitably?

The Arbor City Community Foundation (ACCF) was a medium-sized endowment established in Illinois in the late 1970s through the hard work of several local families. The vision of the ACCF was to be a comprehensive center for philanthropy in the greater Arbor City region. ACCF had a fund balance (known collectively as "the fund") of just under $240 million. The ACCF board of trustees had appointed a committee to oversee investment decisions relating to the foundation assets. The investment committee, under the guidance of the board, pursued an active risk-management policy for the fund. The committee members were primarily concerned with the volatility and distribution of portfolio returns. They relied on the value-at-risk (VaR) methodology as a measurement of the risk of both short- and mid-term investment losses. The questions in Part (A) of the case direct the students to analyze the risk inherent in both one particular asset and the entire ACCF portfolio. For this analysis the students need to calculate daily VaR and monthly VaR values and interpret these figures in the context of ACCF's risk management. In Part (B) the foundation receives a major donation. As a result, the risk inherent in its portfolio changes considerably. The students are asked to evaluate the risk of the fund's new portfolio and to perform a portfolio rebalancing analysis.

The Arbor City Community Foundation (ACCF) was a medium-sized endowment established in Illinois in the late 1970s through the hard work of several local families. The vision of the ACCF was to be a comprehensive center for philanthropy in the greater Arbor City region. ACCF had a fund balance (known collectively as "the fund") of just under $240 million. The ACCF board of trustees had appointed a committee to oversee investment decisions relating to the foundation assets. The investment committee, under the guidance of the board, pursued an active risk-management policy for the fund. The committee members were primarily concerned with the volatility and distribution of portfolio returns. They relied on the value-at-risk (VaR) methodology as a measurement of the risk of both short- and mid-term investment losses. The questions in Part (A) of the case direct the students to analyze the risk inherent in both one particular asset and the entire ACCF portfolio. For this analysis the students need to calculate daily VaR and monthly VaR values and interpret these figures in the context of ACCF's risk management. In Part (B) the foundation receives a major donation. As a result, the risk inherent in its portfolio changes considerably. The students are asked to evaluate the risk of the fund's new portfolio and to perform a portfolio rebalancing analysis.