個案總覽

In November 2006, Alec Berg, a successful hedge fund manager, must decide whether to invest in the initial public offering (IPO) of the Hertz Corporation. The IPO followed a leveraged buyout (LBO) of Hertz that was completed in December 2005 by three prominent private equity firms that had combined to purchase Hertz from the Ford Motor Company for $14.9 billion. The LBO sponsors had borrowed an additional $1 billion on top of the buyout financing to pay themselves a special dividend in June 2006. This loan would be repaid with the IPO proceeds and any remaining proceeds from the IPO would go to the sponsors. The IPO generated widespread criticism with respect to the speed with which the IPO was conducted and the payment of special dividends. In the face of this criticism, the demand for the Hertz IPO weakened, and the offer price was reduced from the initial file price range of $16-$18 to just $15. Berg must assess whether at $15 per share, Hertz offers an attractive investment for this fund. The case provides the necessary information for students to analyze the sponsors' returns on their investment in Hertz and the attractiveness of the $15 offer price to public shareholders. The case also offers an opportunity for students to discuss the controversy surrounding the payment of special dividends and the claim that private equity sponsors invest with a long-term perspective that creates value for the company.

This case is designed as an introductory exercise to familiarize students with several methods used to value early-stage companies. The value of a young biotech company is compared under the venture capital (VC), discounted cash flow (DCF), and real option methods of valuation. Students are asked to value the firm under the VC and DCF methods and then compare those values to the value obtained under the real option method. It is suggested that the student spreadsheet (UV4357) be assigned in advance of the class with instructions to have students value the firm under the VC and DCF methods. A separate worksheet in the file (which can be hidden at the instructor's discretion) provides the option valuation for later discussion purposes. A technical note, "Valuing the Early-Stage Company" (UV1363), covering the basics of the VC and DCF methods of valuation can be assigned with the case.

Spreadsheet Supplement for UV1094.

Spreadsheet Supplement for 209091.

Washington Mutual issues 6 billion Euro of covered bonds in 2006. The objective of the case is to ask whether these bonds are mispriced in late 2008. The case is set in September 20008, and Washington Mutual is facing considerable distress due to mounting losses on its mortgage portfolio. Following investment bank Lehman Brother's Chapter 11 bankruptcy protection filing in mid September, the price of Washington Mutual's covered bonds has fallen to 75 per 100 of face value. As these bonds are over-collateralized, the case asks students to evaluate the underlying collateral portfolio in the event of liquidation, as well as assessing the likelihood of different outcomes. The case takes place during a period of considerable uncertainty in the global capital markets.

Spreadsheet supplement for case UV1056.

Spreadsheet Supplement for 208062.

Spreadsheet Supplement for INS055

Spreadsheet Supplement for INS055 and INS235

Spreadsheet Supplement for INS055, INS235 and INS236

Spreadsheet Supplement for INS055, INS235, INS236 and INS237

Spreadsheet Supplement for case 309001

Spreadsheet Supplement for case 709040

Spreadsheet Supplement for case 709449

The financial success of dairy farms depends critically on the price of their main output, milk. Large volatility in the price of milk poses a considerable business risk to dairy farms. This is particularly true for family-run dairy farms. The question then arises: how can a farm owner hedge the milk price risk? The standard approach to establish a price floor for a commodity such as milk is to purchase put options on commodity futures. At the Chicago Mercantile Exchange, farmers can buy put options on the price of a variety of milk products. However, the price a farm receives for its milk depends on many factors and is unique to the farm. Thus, a farmer cannot directly buy put options on the price he receives for the milk his farm produces. Instead the farmer needs to determine which of the options available for trade at the Chicago Mercantile Exchange offer the best hedge for his own milk price. The assignment in this case is to examine historical data on several prices of milk products and the milk price received by a family-run dairy farm in California. Students need to find the price that is most closely correlated to the farm's milk price and to then choose options with the appropriate strike price that serve as the best hedge for the farm's price risk.

Having started Enjoy Life Foods with a classmate at the Kellogg School in the business plan writing class, Scott Mandell had grown from a business plan , Mandell was ready for the next step, a move onto the national stage with Whole Foods. He estimated product promotion would cost several thousand dollars more than revenues in the first year. If sales fell short of his plan, his losses would soar. If sales forecasts were met, the company would achieve profitability in the time period Mandell promised to investors. In the meeting with Whole Foods representative, Mandell spoke about the uniqueness of the hypoallergenic snacks and presented the company's ability to grow sales. When he finished his sales pitch, the Whole Foods representative told him he liked the product, but had no room for it on the shelves. Mandell was put on the spot and needed to think quickly. He might not get another chance to convince the Whole Foods representative to make room for Enjoy Life Foods. He had just seconds to think of a response before the representative walked out the door for another meeting. What could Mandell say to make the representative see the value in taking a chance on Enjoy Life Foods? What creative solutions to the "shelf space" dilemma could he offer?

Spreadsheet for case UV1474