| HBS Case Collection
(Revised from original 1992 version)
Lockheed Aeromod Center, Inc.
A wholly-owned subsidiary of Lockheed Corp. has an $11 million expansion underway in South Carolina. The company must decide how best to take advantage of the opportunity to issue tax exempt debt. Specifically, the decision involves choices about the maturity and redemption structure of the proposed issue. Designed to let students isolate interest tax shields and subsidies, and to value these elements of a financing package separately, as part of an "adjusted present value" analysis.
Keywords: Business Subsidiaries;
Borrowing and Debt;
Luehrman, Timothy A. "Lockheed Aeromod Center, Inc." Harvard Business School Case 292-123, November 1992. (Revised from original March 1992 version.)