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Spreadsheet Supplement for case 292005.

This large tobacco and diversified food processor is seeking to refinance debt funds raised to accomplish a large acquisition. It has filed a large "shelf" registration that authorizes it to issue during the subsequent two years. At the time of the case, the market looks attractive and the company's CEO is trying to decide whether to issue debt and, if so, in what form. Teaching objective: to familiarize students with the shelf registration form of underwriting, to analyze an issuer's operating and financial profile preparatory to going to the public market, and to assess the position the issuing company should take towards the investment bankers who want to be awarded the business.

Looks at the company's plans for a new debt offering under the Rule 415 shelf underwriting provision--in this instance from the vantage point of the lead investment banker for the deal. The decision-maker must assess the risks of the issuer, the tone of the market, the price and commission to be set, and other details relating to the offering, including whether to use a syndicate, and whether to hedge. Gives students the opportunity to analyze the operating and financial data relating to a leading U.S. company in the context of a new debt offering. Students assume the role of the investment banker and can contrast the preoccupations of the vendor with those of the issuer.

Supplements the (B) case.

Pioneer is an integrated oil company. Its operations include exploration and development, production, transportation, and marketing. The case focuses on Pioneer's cost of capital calculations and its choice between a single company-wide cost of capital or divisional costs of capital. Provides students the opportunity to learn how to calculate a company-wide weighted average cost of capital. An appropriate measure of the cost of equity capital is presented so that students are able to challenge their understanding of key concepts by critiquing the company's measure and suggesting their own.

Examines California Public Employees Retirement System (CalPERS), the world's fourth largest pension fund. Dale Hanson, CEO of CalPERS, has a problem; how does he use CalPERS' influence as the holder of a small percentage of 1,300 American companies to put pressure on corporate America to achieve better returns for shareholders? The case discusses the constraints which confront CalPERS as a quasi-state agency and describes their efforts to improve corporate governance to date.

Spreadsheet Supplement for case 291045.

The rapid depreciation of the peso in 1982 precipitated a crisis at Grupo Alfa, Mexico's largest private company. The company's peso cash flow was insufficient to service its large dollar-denominated debt. Students are asked to formulate a plan for restructuring Alfa's debt in the context of Mexican laws governing property and creditors' rights. To do this, students must decide on a business strategy, make financial projections and understand participants' negotiating strengths and weaknesses. Teaching objective: In addition to the basic elements of a large corporate restructuring, the case highlights the roles played by governments and legal systems. Provides a useful contrast to U.S.-style restructurings.

After a decade of mediocre performance, the Norton Co. enters 1990 with the prospect of increased sales in the next few years. Yet Norton is pursuing slow growth industries, and a lower than expected earnings announcement at the beginning of 1990 has depressed earnings forecasts by brokerage firms. BTR, a large highly successful British conglomerate, is considering making a takeover offer of Norton but is troubled by a number of issues. This case takes a behind-the-scenes look at how a company like BTR would value a potential takeover target and analyze how the acquisition would impact BTR's operations and performance, and how it might stave off competing bids if it were to make an offer.

Japonica Partners, an investment firm, is trying to determine whether there is any unseen value in Sunbeam Oster Co., Inc., a Chapter 11 debtor. If there is, Japonica must consider the means by which they can acquire control of a company in Chapter 11.

William Apfelbaum, president and CEO of Transportation Displays, Inc., must restructure both the company's method of doing business and its liabilities to keep it from bankruptcy. The value he hopes to receive from the reorganized company will be an important issue in the restructuring negotiations with creditors.

Cumberland has been in Chapter 11 for 18 months and is trying to formulate a plan of reorganization that will satisfy a variety of claimants. Teaching objective: valuation and negotiation issues.

A U.S. trucking company is considering using debt for the first time to acquire another company. The directors of the company are divided in their opinion of the likely impact of leverage on Continental Carriers' performance. Their differences must be reconciled and a decision reached about whether to issue new debt or equity to fund the acquisition. Students are introduced to the impact of leverage on performance variables such as profits, growth, earnings per share, and stock price. A rewritten version of an earlier case.

A company in financial distress must design a successful exchange offer or face Chapter 11. Covers valuation and negotiation issues related to financial distress and the decision to file under Chapter 11 of the Bankruptcy Code.

Spreadsheet Supplement for case 291020

Spreadsheet Supplement for case 291081.

A California based security guard firm considers the acquisition of another security guard company. The value of the target firm and the financing of the acquisition are the key issues.

The state of Connecticut wants to raise $325 million of long-term fixed-rate debt. One alternative is to do this synthetically--issue long-term variable rate debt and enter into an interest rate swap. The case is a vehicle for analyzing various floating rate structures and various kinds of swaps. Also raises issues relating to the default risk of swaps, as well as the term structure of the tax exempt and taxable debt markets.

Describes Jaguar's product market problems in 1989, and its attractiveness to GM and Ford as an acquisition target. Students are asked to evaluate the suitability of GM and Ford as business partners for Jaguar, and to determine how much each should be willing to pay to acquire part or all of Jaguar. They are also asked to formulate tactics for extracting the highest possible price from each bidder.

Spreadsheet Supplement for case 291034.