Case | HBS Case Collection | February 1987 (Revised March 2006)

Arley Merchandise Corporation

by William E. Fruhan Jr.

Abstract

Involves the initial public offering of a firm's stock. The offering includes a money-back guarantee to investors from the issuing firm which comes in the form of a "put" option. Option valuation is thus an important issue in this case.

Keywords: Initial Public Offering; Stocks; Cases; Valuation; Stock Options; Apparel and Accessories Industry; Service Industry;

Citation:

Fruhan, William E., Jr. "Arley Merchandise Corporation." Harvard Business School Case 287-063, February 1987. (Revised March 2006.)