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Harvard University decides upon the asset allocation for its endowment, and the mode in which it should be managed.

This case allows students' to exercise their abilities in financial forecasting and analysis, and capital projects analysis. It offers a good omnibus review of foundational tools and concepts. In August 1993, a new CEO joins this small manufacturer of compact disks to discover that the firm is in the midst of a financial crisis, induced by rapid growth. The CEO asks an analyst for help with five tasks: (1) review historical performance of the firm; (2) forecast financing requirements for the next two years; (3) exercise the forecasting model to identify key-driver assumptions; (4) estimate Astral's weighted-average cost of capital; and (5) analyze a proposed investment in a packaging machine. The student in the role of the analyst must offer insights and recommendations based on the work.

The director of marketing and operations for a financial newsletter must deal with a host of issues that surround the practice of renting mailing lists and soliciting new subscribers by direct mail. The case can be used to introduce the concept and calculation of customer lifetime value.

Spreadsheet Supplement for case 295005

Provides an introduction to zero coupon bonds and stripping coupon bonds. Concerns the relationship between the spot curve, the strip curve, and the coupon curve.

Underscores the arbitrage implicit in the pricing of a complex unit of debt and warrants issued by the Coca-Cola Co.

Because of the regulatory environment in the railroad industry, J&L Railroad's profitability is dependent upon the price of diesel fuel. In this case, the student must decide how much of next year's expected fuel demand should be hedged and how it should be hedged. Hedging alternatives include exchange-traded futures and options as well as commodity swaps, collars, and corridors offered by Continental Bank's Risk Management Group.

Over seven years, the owner of a highly successful drive-through, take-out hamburger chain has built his business and knew that there was a tremendous potential for the idea. He was unsure whether to expand by opening additional company-operated stores (using retained earnings), or by establishing a franchise system. Two Excel spreadsheets are available; one for the student, product 7A94B008 and one for the instructor, product 5A94B08.

Leland O'Brien Rubinstein Associates, Inc. (LOR), which profited by selling portfolio insurance to institutional investors, attempts to rebuild itself after the 1987 stock market crash by creating new products to meet the unsatisfied needs of equity investors. LOR proposes to sell a new family of products, called the SuperTrust, which would let investors trade an exchange-listed basket security and to buy collateralized put options on broad equity indices. The case examines the needs that gave rise to the SuperTrust project as well as the institutional roadblocks LOR had to overcome to bring this offering to market.

Supplements Fremont Financial (B).

Spreadsheet Supplement for case 294139

A comprehensive review case that entails both investment and financing decisions. Students must value an acquisitions opportunity and determine how Nelson Paper ought to finance both the acquisition and its regular capital expenditures program.

Less than a year after Sealed Air embarked on a program to improve manufacturing efficiency and product quality, the company borrowed almost 90% of the market value of its common stock and paid it out as a special dividend to shareholders. Management purposefully and successfully used the leveraged recapitalization as a watershed event, creating a crisis that disrupted the status quo and promoted internal change, which included establishing a new objective, changing compensation systems, and reorganizing manufacturing and capital budgeting processes.

Supplements the (A) case.

Spreadsheet Supplement for case 294123

Presents the merger negotiations between Bank of Boston (BOB) and Shawmut National Corp. (SNC), two of the country's largest bank holding companies and requires students to value BOB's current offer for SNC. Provides an overview of recent events and trends in the commercial banking industry including the rise of interstate mergers and bank failures.

Supplements the (A) case.

A major shopping center developer and an insurance company form a joint venture to develop a 900,000 square foot super-regional shopping center. Describes the nine-year struggle to deal with market, regulatory, and financial issues to get the project ready for construction. However, there is now a need for additional equity, and the partners must decide if they should still go forward with the project and how the partnership should be restructured.

Spreadsheet Supplement for case 394200