Case Problems in Finance

Case Problems in Finance is a Harvard case course presenting real business situations that pose debatable alternative courses of action. The cases contain problems that can be narrowed but not always settled by the usual techniques of financial analysis. It will teach students to discover ways of thinking that are productive in handling different types of managerial problems intelligently. The cases are grouped by major topics: financial analysis and forecasting, cost of capital, working capital management, capital budgeting, dividend policy, debt policy, financial execution, and mergers and restructuring.

* signifies a new case

Part 1: Financing Current Operations

Introductory Exercises

Financial Ratio Analysis Assessing a Firm’s Future Financial Health

Forecasting Pro Forma Financial Statements Tire City, Inc. *

Estimating Funds Requirements – Short-term Sources of Funds

Funding Growth Butler Lumber Company *Note on Bank Loans

Funding Seasonal Needs Toy World, Inc.

Funding Cyclical Needs SureCut Shears, Inc.

Managing Working Capital Dell’s Working Capital *

Cash Budgeting Hampton Machine Tool

Part II: Capital Structure, Long-Term Financing and Risk Management

Debt Policy and Long-Term Financing

Target Debt Policy E.I. DuPont de Nemours and Company (1983)

Costs of Financial Distress Williams Company *The Loewen Group, Inc. (Abridged) *

Capital Structure Decisions American Home Products Corporation Debt Policy at UST *Diageo plc *

Earnings Impact of Leverage Continental Carriers, Inc.

Pricing Debt Instruments Fixed Income Valuation *

Credit Ratings and Access to Debt Markets Hospital Corporation of America (A)

Equity Financing Stone Container Corporation (A) *

Equity-Linked Securities MCI Communications Corporation (1983)Cox Communications *

Cross-Border Financing Compañia de Teléfonos de Chile

Cash Distribution Dividend Policy at FPL Group, Inc. (A) Recapitalization Ford’s Value Enhancement Plan *

Event Risk Marriott Corporation (A)

Derivative Instruments and Risk Management

Basic Derivative Instruments Introduction to Derivative Instruments

Valuing Derivatives Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) *

Interest Rate Derivatives Student Educational Loan Fund, Inc. (Abridged) *

Options and Security Design Arley Merchandise Corporation *

Pension Fund Risk Management The Pension Plan at Bethlehem Steel, 2001 *

Risk Identification and Selection of Risk-Management Techniques Tiffany & Company (1993)United Grain Growers Limited (A) *

Part III: Valuation and Investment

Valuing and Selecting Investment Opportunities

Discounted Cash Flow Analysis Valuing Capital Investment Projects *

Introduction to Decision Trees Merck & Company: Evaluating a Drug Licensing Opportunity*

Basic Value Creation Tree Values*

Identifying Incremental Cash Flows The Super Project

Forecasting Expected Cash Flows Netflix.com, Inc. *A-Rod: Signing the Best Player in Baseball *

Capital Budgeting Ocean Carriers *Whirlpool Europe *

Multiples Health Development Corporation *

Cost of Capital and Valuation

Cost of Capital Diversification, the Capital Asset Pricing Model, and the Cost of Equity Capital

Capital Asset Pricing Model and the Cost of Equity Capital Ameritrade Holding Corporation, 1997 *

Risk and the Opportunity Cost of Capital Pioneer Petroleum Corporation

Leveraged Betas Leveraged Betas and the Cost of Equity Capital W

eighted Average Cost of Capital Marriott Corporation: The Cost of Capital (Abridged)Lex Service PLC: Cost of Capital *

Valuation Alternatives Free Cash Flow Valuation Methods: Weighted Average Cost of Capital (WACC) and Adjusted Present Value (APV)

*Capital Cash Flows: A Simple Approach to Valuing Risky Cash Flows *

Advanced Valuation

Valuing Projects and Businesses Radio One, inc. *American Chemical Corporation

Valuing Companies Adecco SA’s Acquisition of Olsten Corporation

*Cooper IndustriesInterco

Initial Public Offering Eskimo Pie Corporation (Abridged) *Netscape’s Initial Public Offering

Hostile Takeovers Gulf Oil Corporation – TakeoverPhilip Morris Companies and Kraft, Inc.

Highly Leveraged Transactions John M. Case CompanyCongoleum Corporation (Abridged)RJR Nabisco

Real Options Laura Martin: Real Options and the Cable Industry *Arundel Partners: The Sequel ProjectCapital

Projects as Real Options: An Introduction

Part IV: Review and Synthesis

Integrated Financial Decisions and Comprehensive Review Staged Equity Financing Pharmacyclics: Financing Research and Development *

Business Plan Evaluation Valuing Project Achieve *

Management Buyout Seagate Technology Buyout *

Merger and Acquisition Friendly Cards, Inc.Pinkerton (A)

Vodaphone Airtouch’s Bid for Mannesmann *

Index of Cases