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This is a supplement to Air New Zealand: The Recapitalization Decision (A), product 902N17. The chairman of Air New Zealand is chairing the company's first annual meeting and is faced with a number of financial and strategic issues that have an impact on the survival of the airline.

Vivosonic is a start-up biomedical company that needs to raise $565,000 to continue research and development of its biomedical devices. The executive director of a venture capital firm feels Vivosonic's technology is sound but the costs for the company would be high. He must decide whether or not to invest in the company and determine what the best terms and conditions are for the deal.

Air New Zealand is a national airline faced with a number of important strategic and financial issues. The company's recent acquisition of Ansett Australia had proved to be disastrous and a severe financial drain for Air New Zealand. Key issues facing Air New Zealand include the long-term strategic positioning of the business, and determining anticipated financing needs, the appropriate gearing ratio or capitalization (debt-to-equity) rate, and available sources of financing. A recent research report had summarized two fundamental questions that impacted on the company's stock price and needed to be addressed: Would the New Zealand government relax Air New Zealand's ownership restrictions in order to allow Singapore Airlines to increase its stake from 25 per cent to 49 per cent? If so, would any proposal fix Air New Zealand's balance sheet to allow Air New Zealand and Ansett to once again become viable airline competitors? Supplement to this case is Air New Zealand: The Recapitalization Decision (B), product number 9B02N020.

A scientist at a well-known university has been working for several years on the development of a drug that is a treatment for a particular type of cancer. He has successfully completed all pre-clinical trials and has filed an application for an investigational new drug. Once the application has been accepted by the Food and Drug Administration, the scientist plans to embark on a series of clinical trials. Although his work to this point has been financed by research grants and personal funds, he now needs to obtain more substantial financing from a venture capitalist. However, the scientist does not know what his fledgling company is worth.

This is a supplement to Air New Zealand: The Recapitalization Decision (A), product 9B02N017. The chairman of Air New Zealand is chairing the company's first annual meeting and is faced with a number of financial and strategic issues that have an impact on the survival of the airline.

Timbercreek Investments Inc. is a small investment company that specializes in the management and acquisition of income-producing real estate. For an upcoming directors meeting, the director of acquisitions must make a recommendation on the financial needs of the company for the fiscal year. With considerable growth over the past two years, the company would need additional funds to pay for the increase in operating expenses. He must analyse the company's financial statement and decide whether the company should obtain a bank loan, ask the partners to contribute further equity or approach investors.

The head of production for Rexford Studios must analyze the terms and value consequences of an international financing involving a German film fund. The financing involves a sale-leaseback structure where international tax rules give rise to a sizable economic pie that is divided up among the fund investors, the studio, and the arrangers. To conduct the negotiation, the producer must value the cash flow streams to each of the parties and recognize the nature of the tax arbitrage in the context of his overall financing needs. As a consequence, the major issues involved in film financing and the nature of sale-leaseback transactions driven by tax considerations are explored, as is the competition between countries for film production. Finally, the underlying determinants of opportunities created by international tax rules are valued. To obtain executable spreadsheets (courseware), please contact our customer service department at [email protected].

This case considers the alternative financing mechanisms for film financing, the evolution of film finance in the United States, and the nature of tax-motivated film financing in the United States and around the world. It develops the strategy driving motion picture finance and the various instruments that advance that strategy. Aggregate trends in those financing patterns are examined with special attention paid to tax-driven financing strategies. It concludes with an evaluation of the international market in fiscal incentives for motion picture finance.

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This note provides an abbreviated discussion of the essential elements of the term sheet provided by a venture capitalist to a proposed investor. A sample term sheet is included.

Explains why project companies in general and large projects in particular represent an interesting and managerially relevant subset of total capital investment and why they merit academic research and instruction. Serves as an introductory note for the Large-scale Investment course, a case-based course about project finance designed for second-year MBA students. In addition, provides empirical data on project-financed investment as a subset of total capital investment.

This note provides an abbreviated discussion of the essential elements of the term sheet provided by a venture capitalist to a proposed investor. A sample term sheet is included.

On September 25, 2002, Peter Anderson was due to meet with Morgan Stanley in ten minutes. Anderson had been the finance director of Canary Wharf Group (CWG) since Paul Reichmann and a group of investors had repurchased Canary Wharf in 1995. Anderson had joined Olympia & York in 1989 to finance Canary Wharf and had struggled through the bankruptcy of the project and its parent company, Olympia & York. He had stayed with Reichmann through those difficult years and worked with him to buy back the project from the banks. Largely due to Anderson's ability to raise the capital necessary for Canary Wharf to fund its growth, the project was now universally acclaimed as hugely successful. Anderson had now invested over half his professional life in Canary Wharf and he was anxious to find a solution to the conflicting objectives of the CWG.

Describes T.P. Lee, the founder and CEO of Jinwoong, a 19-year-old entrepreneurial company in Korea that has grown to become the world's largest manufacturer of camping tents. Labeled by Fortune as one of the most promising entrepreneurs in Asia in 1993, Lee faces some serious management challenges by October 1998. Largely due to the Korean financial crisis of 1997-98, Lee must rethink the financing and expansion plans for his firm. To deal with these challenges, he could seek outside funding from two different groups of private equity investors or from a corporate restructuring fund set up by the Korean government. All of these decisions reflect Jinwoong's long-term strategy and Lee's assessment of the different offers.

Description: This glossary contains a list of almost 1,000 definitions for terms commonly used in the field of project finance.

Focuses on the competitive decline of the integrated steel producers in the United States from 1970 to 2002. Issues include: Should the U.S. government impose tariffs to try to protect the industry? What should labor unions do, if anything, to protect jobs and wage rates of employees in failing companies?

This note addresses the methods used in valuing intellectual property, with a particular focus on patents. The note defines intellectual property and explains its growing importance. It also describes income methods, market approaches, discounted-cash-flow methods, and option-valuation methods.

Dimensional Fund Advisors (DFA) is an investment management firm that prides itself on basing its investment strategies on sound academic research. Many of the best-known finance research papers of the past two decades (especially those by Eugene Fama and Kenneth French, who work closely with DFA) have led to DFA investment strategies. DFA began as a small-stock fund, attempting to take advantage of the "size affect" (excess performance of small stocks) that had been discovered by a number of academic researchers. Later, DFA added "value" strategies to its mix of offerings. After academic research documented superior performance by value stocks in a multitude of countries, DFA began to create a variety of international value-stock and small-stock investment funds. The company was highly successful, despite missing out on the great 1990s growth-stock boom. DFA's assets under management grew from $8 billion to $40 billion between 1991 and 2002. With value stocks having performed well in the first two years of the new decade, DFA is experiencing continued growth of its investor base and is now seeking new areas in which it can add value for investors while continuing to claim to have no special "stock-picking" ability.

This case presents a short hisotry of mortgage finance in the United States and the two government-sponsored enterprises that dominate the market. Recent debates about their current and future roles are discussed.