Richard S. Ruback is the Willard Prescott Smith Professor of Corporate Finance at the Harvard Business School. He is currently focusing his research in applied corporate finance, especially on corporate-control transactions and valuation. His course development work parallels his research interests; currently he teaches a second year course, Private Equity Finance, and is the Unit Head of the Finance Department. Ruback earned his Ph.D. in business administration at the University of Rochester in 1980 and taught at MIT's Sloan School before joining the HBS faculty as a visiting professor in 1987. He was appointed associate professor in 1988 and full professor in 1989. Ruback has served as an editor for the Journal of Financial Economics and is the author of numerous articles on corporate finance. Ruback has served as a consultant to corporations on corporate finance issues and has acted as an independent advisor to outside directors. He also served as an expert witness on valuation and security issues.
Publications
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Manual
| 2005
Teaching Manual to accompany Case Problems in Finance
W. Carl Kester, Richard Ruback and Peter Tufano
Keywords: Problems and Challenges;
Finance;
Teaching;
Books;
Citation: Kester, W. Carl, Richard Ruback, and Peter Tufano, eds. Teaching Manual to accompany Case Problems in Finance. 12th ed. Chicago: McGraw-Hill, 2005.
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Casebook
| 2004
Case Problems in Finance
W. Carl Kester, Richard Ruback and Peter Tufano
Keywords: Problems and Challenges;
Finance;
Citation: Kester, W. Carl, Richard Ruback, and Peter Tufano, eds. Case Problems in Finance. 12th ed. Chicago: McGraw-Hill, 2004.
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Book
| 1997
Case Problems in Finance
W. C. Kester, W. E. Fruhan Jr., T. R. Piper and R. S. Ruback
Keywords: Finance;
Citation: Kester, W. C., W. E. Fruhan Jr., T. R. Piper, and R. S. Ruback, eds. Case Problems in Finance. 11th ed. Irwin, 1997.
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Book
| 1992
Case Problems in Finance
W. E. Fruhan Jr., W. C. Kester, S. P. Mason, T. R. Piper and R. S. Ruback
Keywords: Finance;
Citation: Fruhan, W. E., Jr., W. C. Kester, S. P. Mason, T. R. Piper, and R. S. Ruback, eds. Case Problems in Finance. 10th ed. Irwin, 1992.
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Manual
| 1992
Teacher's Manual for Case Problems in Finance
W. E. Fruhan Jr., W. C. Kester, S. P. Mason, T. R. Piper and R. S. Ruback
Keywords: Finance;
Cases;
Citation: Fruhan, W. E., Jr., W. C. Kester, S. P. Mason, T. R. Piper, and R. S. Ruback, eds. Teacher's Manual for Case Problems in Finance. 10th ed. Homewood, IL: Irwin, 1992.
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Article
| Delaware Journal of Corporate Law
|
An Economic View of the Market for Corporate Control
R. S. Ruback
Keywords: Economics;
Markets;
Business Ventures;
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Article
| Review of Financial Studies
|
Valuation of Bankrupt Firms
S. C. Gilson, E. S. Hotchkiss and R. S. Ruback
This study compares the market value of firms that reorganize in bankruptcy with estimates of value based on management's published cash flow projections. We estimate firm values using models that have been shown in other contexts to generate relatively precise estimates of value. We find that these methods generally yield unbiased estimates of value, but the dispersion of valuation errors is very wide—the sample ratio of estimated value to market value varies from less than 20% to greater than 250%. Cross-sectional analysis indicates that the variation in these errors is related to empirical proxies for claimholders' incentives to overstate or understate the firm's value.
Keywords: Valuation;
Business Ventures;
Insolvency and Bankruptcy;
Citation: Gilson, S. C., E. S. Hotchkiss, and R. S. Ruback. " Valuation of Bankrupt Firms." Review of Financial Studies 13, no. 7 (spring 2000): 43–74. (Abridged version reprinted in The Journal of Corporate Renewal 13, no. 7 (July 2000))
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Article
| MIT Sloan Management Review
|
Which Takeovers are Profitable: Strategic or Financial?
Paul M. Healy, Krishna G. Palepu and Richard S. Ruback
Keywords: Integration;
Profit;
Strategy;
Finance;
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Article
| Journal of Applied Corporate Finance
|
The Market Pricing of Cash Flow Forecasts: Discounted Cash Flow vs. the Method of Comparables
S. N. Kaplan and R. S. Ruback
Keywords: Price;
Cash Flow;
Forecasting and Prediction;
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Article
| Journal of Finance
|
The Valuation of Cash Flow Forecasts: An Empirical Analysis
S. N. Kaplan and R. S. Ruback
Keywords: Valuation;
Cash Flow;
Forecasting and Prediction;
Theory;
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Article
| Journal of Financial Economics
|
Does Corporate Performance Improve after Mergers?
Paul M. Healy, Krishna G. Palepu and Richard S. Ruback
Keywords: Mergers and Acquisitions;
Performance;
Business Ventures;
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Article
| RAND Journal of Economics
|
Targeted Repurchases and Common Stock Returns
R. S. Ruback and W. Mikkelson
Keywords: Stocks;
Finance;
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Article
| Journal of Financial Economics
|
The Structure and Governance of Enterprise
Michael C. Jensen and Richard S. Ruback
Keywords: Governance;
Business Ventures;
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Journal Article
| Journal of Financial Economics
|
Coercive Dual Class Exchange Offers
R. S. Ruback
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Article
| Journal of Finance
|
Inflation, Uncertainty and Investment
Carliss Y. Baldwin and R. S. Ruback
Keywords: Inflation and Deflation;
Investment;
Risk and Uncertainty;
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Article
| Journal of Financial Economics
|
Calculating the Market Value of Riskless Cash Flows
R. S. Ruback
Keywords: Value;
Markets;
Price;
Cash Flow;
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Article
| Journal of Financial Economics
|
An Empirical Analysis of the Interfirm Equity Investment Process
W. Mikkelson and R. S. Ruback
Keywords: Theory;
Equity;
Investment;
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Journal Article
| Journal of Accounting & Economics
|
Takeovers and Managerial Compensation: A Discussion
R. S. Ruback and W. Mikkelson
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Article
| Journal of Political Economy
|
Unionization and Profitability: Evidence from the Capital Market
M. B. Zimmerman and R. S. Ruback
Keywords: Labor Unions;
Profit;
Information;
Markets;
Finance;
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Article
| Seminar on the Analysis of Security Prices, Proceedings
|
Corporate Investments in Common Stock
W. Mikkelson and R. S. Ruback
Keywords: Investment;
Stocks;
Business Ventures;
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Journal Article
| Journal of Finance
|
The Cities Service Takeover: A Case Study
R. S. Ruback
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Article
| Journal of Financial Economics
|
Assessing Competition in the Market for Corporate Acquisitions
R. S. Ruback
Keywords: Competition;
Business Ventures;
Mergers and Acquisitions;
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Article
| Journal of Financial Economics
|
The Market for Corporate Control: The Scientific Evidence
M. C. Jensen and R. S. Ruback
Keywords: Business Ventures;
Citation: Jensen, M. C., and R. S. Ruback. " The Market for Corporate Control: The Scientific Evidence." Journal of Financial Economics 11, nos. 1-4 (April 1983): 5–50. (Reprinted in The Modern Theory of Corporate Finance, edited by M.C. Jensen and C. W. Smith. New York: McGraw-Hill Book Company, 1984.)
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Article
| Journal of Political Economy
|
Effects of Nominal Contracting on Stock Returns
K. French, G. W. Schwert and R. S. Ruback
Keywords: Stocks;
Finance;
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Article
| Seminar on the Analysis of Security Prices, Proceedings
|
Assessing Competition in the Market for Corporate Acquisitions
R. S. Ruback
Keywords: Mergers and Acquisitions;
Competition;
Markets;
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Article
| Journal of Financial Economics
|
The Effect of Discretionary Price Control Decisions on Equity Values
R. S. Ruback
Keywords: Price;
Decision Making;
Value;
Finance;
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Article
| MIT Sloan Management Review
|
The Conoco Takeover and Stockholder Returns
R. S. Ruback
Keywords: Stocks;
Finance;
Energy Industry;
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Article
| Seminar on the Analysis of Security Prices, Proceedings
|
Effects of Nominal Contracting on Stock Returns
K. French, G. W. Schwert and R. S. Ruback
Keywords: Stocks;
Profit;
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Article
| Journal of Financial Economics
|
Tender Offers and Stockholder Returns: An Empirical Analysis
P. Dodd and R. S. Ruback
Keywords: Ownership;
Money;
Stocks;
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Chapter
| The Handbook of Corporate Finance: Empirical Corporate Finance
| 2002
Behavioral Corporate Finance: A Survey
Malcolm Baker, Richard Ruback and Jeffrey Wurgler
Research in behavioral corporate finance takes two distinct approaches. The first emphasizes that investors are less than fully rational. It views managerial financing and investment decisions as rational responses to securities market mispricing. The second approach emphasizes that managers are less than fully rational. It studies the effect of nonstandard preferences and judgmental biases on managerial decisions. This survey reviews the theory, empirical challenges, and current evidence pertaining to each approach. Overall, the behavioral approaches help to explain a number of important financing and investment patterns. The survey closes with a list of open questions.
Keywords: Debt Securities;
Financial Management;
Investment;
Problems and Challenges;
Decisions;
Prejudice and Bias;
Price;
Research;
Theory;
Behavioral Finance;
Corporate Finance;
Citation: Baker, Malcolm, Richard Ruback, and Jeffrey Wurgler. " Behavioral Corporate Finance: A Survey." In The Handbook of Corporate Finance: Empirical Corporate Finance, edited by Espen Eckbo. New York: Elsevier/North-Holland, 2002.
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Chapter
| Corporate Takeovers: Causes and Consequences
| 1988
Do Target Shareholders Lose in Unsuccessul Control Contests?
R. S. Ruback
Keywords: Business and Shareholder Relations;
Corporate Governance;
Citation: Ruback, R. S. "Do Target Shareholders Lose in Unsuccessul Control Contests?" In Corporate Takeovers: Causes and Consequences, edited by A. J. Auerback. Chicago: University of Chicago Press, 1988.
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Chapter
| Mergers and Acquisitions
| 1988
An Overview of Takeover Defenses
R. S. Ruback
Keywords: Acquisition;
Citation: Ruback, R. S. "An Overview of Takeover Defenses." In Mergers and Acquisitions, edited by A. J. Auerback. Chicago: University of Chicago Press, 1988.
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Chapter
| The Law and Finance of Corporate Acquisitions
| 1986
The Conoco Takeover and Stockholder Returns
R. S. Ruback
Keywords: Acquisition;
Investment Return;
Stocks;
Energy Industry;
Citation: Ruback, R. S. "The Conoco Takeover and Stockholder Returns." In The Law and Finance of Corporate Acquisitions, edited by Ronald J. Gilson. Mineola, NY: Foundation Press, 1986.
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Working Paper
| HBS Working Paper Series
| 2010
Valuation When Cash Flow Forecasts Are Biased
Richard S. Ruback
This paper focuses adaptations to the discount cash flow (DCF) method when valuing forecasted cash flows that are biased measures of expected cash flows. I imagine a simple setting where the expected cash flows equal the forecasted cash flows plus an omitted downside. When the omitted downside is temporary, the adjustment is to deflate the forecasts and to set the discount rate equal to the cost of capital. However, when the downside is permanent, the adjustment is to deflate the cash flows and to increase the discount rate so that it includes the cost of capital plus the probability of a downside.
Keywords: Forecasting and Prediction;
Cash Flow;
Cost of Capital;
Performance Expectations;
Prejudice and Bias;
Valuation;
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Working Paper
| HBS Working Paper Series
| 1998
Valuation of Bankrupt Firms
Stuart C. Gilson, Edith Hotchkiss and Richard Ruback
Citation: Gilson, Stuart C., Edith Hotchkiss, and Richard Ruback. "Valuation of Bankrupt Firms." Harvard Business School Working Paper, No. 99–064, December 1998.
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Working Paper
| 1987
A Discounting Rule for Risky Assets
S. C. Myers and R. S. Ruback
Citation: Myers, S. C., and R. S. Ruback. "A Discounting Rule for Risky Assets." NBER Working Paper Series, No. 2219, April 1987.
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Case
| HBS Case Collection
|
2012
Roxbury Technology Corporation
Richard S. Ruback and Royce Yudkoff
Roxbury Technology is a Boston-based re-manufacturer of ink and toner cartridges. In early 2012 RTC was re-evaluating its approach to the company's two most important goals: reducing customer concentration and increasing profitability. RTC's largest customer accounted for about 98% of sales and the company had roughly broken even over the last two years. The two goals were intertwined because RTC's sales growth strategy had to be designed so it didn't bring the company into conflict with its largest customer. That raised its marketing costs and reduced profitability.
Keywords: social enterprise;
Business Finance;
Social Entrepreneurship;
Financial Management;
Green Technology Industry;
Manufacturing Industry;
Boston;
Citation: Ruback, Richard S., and Royce Yudkoff. "Roxbury Technology Corporation." Harvard Business School Case 213-029, September 2012.
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Case
| HBS Case Collection
|
2012
Castronics, LLC
Richard S. Ruback and Royce Yudkoff
Patrick Dickinson (HBS '09) and Michael Weiner (MIT's Sloan '07) acquired Castronics, a firm that specialized in threading pipe used in the oil and natural gas industry, at the end of 2009. The partners overcame significant hurdles during the first two years of ownership, which included the loss of nearly half of their workforce, the threatened entry of a formidable competitor into their market, and limited production capacity. In spite of these challenges and many other day-to-day obstacles, by the summer of 2011, the company successfully tripled production and EBITDA and the partners were deciding whether or not to sell the company.
Keywords: small business;
Search Funds;
corporate finance;
Entrepreneurship;
Financial Management;
Energy Industry;
Western United States;
Citation: Ruback, Richard S., and Royce Yudkoff. "Castronics, LLC." Harvard Business School Case 213-028, September 2012.
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Case
| HBS Case Collection
|
2012
MC Tool
Richard S. Ruback and Royce Yudkoff
Two partners acquired MC Tool in October 2007 for $5 million. The company was a machine shop that manufactured parts for a wide variety of applications in the energy, automotive and industrial equipment industries. In their first year of ownership, the partners focused on improving operations and enhancing sales with impressive results: sales doubled and EBTIDA increased by over 40%. But the "Great Recession" had an immediate impact in the fall of 2008 as customers cancelled orders and new sales became scarce. MC Tool's core business was cyclical and risky. The partners were considering transforming the business towards manufacturing more precise parts that would be less cyclical and less risky.
Keywords: Capital Budgeting;
Risk Management;
Risk and Uncertainty;
Business Finance;
Problems and Challenges;
Business Strategy;
Production;
Manufacturing Industry;
United States;
Citation: Ruback, Richard S., and Royce Yudkoff. "MC Tool." Harvard Business School Case 213-013, July 2012.
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Case
| HBS Case Collection
|
2012
Revenue Solutions, LLC
Richard S. Ruback and Royce Yudkoff
Keywords: small business;
partnerships;
Work-Life Balance;
Partners and Partnerships;
Israel;
United States;
Citation: Ruback, Richard S., and Royce Yudkoff. "Revenue Solutions, LLC." Harvard Business School Case 213-032, July 2012.
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Case
| HBS Case Collection
|
2012
Home Nursing of North Carolina
Richard S. Ruback and Royce Yudkoff
Ari Medoff's (HBS '11) goal was to control his own professional destiny by owning his own company. His search identified a suitable acquisition in Home Nursing of North Carolina, and he had negotiated a purchase price of $3.5 million, or 4.2x trailing EBITDA. Medoff had completed his due diligence, arranged financing, and completed the legal documents required to complete the acquisition and anticipated closing the transaction in just a few weeks. But then the sellers surprisingly asked to renegotiate the terms of the note they had agreed to early in the acquisition process. Medoff must decide whether to renegotiate the debt or abandon the transaction.
Keywords: Search Funds;
Small Companies;
Acquisitions;
negotiation;
valuation;
medical services;
Acquisition;
Business Finance;
Negotiation Process;
Decision Making;
North Carolina;
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Supplement
| HBS Case Collection
|
2012
Brennan Warranty Corporation (B)
Richard S. Ruback and Royce Yudkoff
Keywords: private equity;
corporate finance;
entrepreneurial finance;
mergers and acquisitions;
Citation: Ruback, Richard S., and Royce Yudkoff. "Brennan Warranty Corporation (B)." Harvard Business School Supplement 212-075, May 2012.
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Case
| HBS Case Collection
|
2012
(Revised from original 2011 version)
Executive Compensation at Talent Partners
Richard S. Ruback and Royce Yudkoff
Talent Partners' CEO was very successful at growing the business and establishing its leadership position. He was compensated with a mix of salary and options and he did not own any equity in the company. The options were set so that if Talent Partners achieved its financial plan over the next five years, about half of his total compensation would come from the options.
Keywords: Executive Compensation;
Equity;
Stock Options;
Managerial Roles;
Growth and Development Strategy;
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Teaching Note
| HBS Case Collection
|
2012
HCA, Inc. (TN) (A) and (B)
Richard S. Ruback
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Case
| HBS Case Collection
|
2011
(Revised from original 2006 version)
HCA, Inc. (A)
Richard S. Ruback
Focuses on the buyout of HCA by three private equity firms: Bain Capital, KKR, and Merrill Lynch Global Private Equity. It provides an opportunity to discuss a variety of issues related to leveraged buyouts including the process, the role of private equity, the incentives of the participants, the benefits to conflicting shareholders, and the valuation of the buyout.
Keywords: Leveraged Buyouts;
Private Equity;
Investment;
Business and Shareholder Relations;
Conflict and Resolution;
Valuation;
Citation: Ruback, Richard S. " HCA, Inc. (A)." Harvard Business School Case 207-076, December 2011. (Revised from original November 2006 version.)
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Supplement
| HBS Case Collection
|
2011
(Revised from original 2007 version)
HCA, Inc. (B)
Richard S. Ruback
Citation: Ruback, Richard S. " HCA, Inc. (B)." Harvard Business School Supplement 208-070, December 2011. (Revised from original October 2007 version.)
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Case
| HBS Case Collection
|
2011
(Revised from original 2011 version)
Gemini Investors
Richard S. Ruback and Royce Yudkoff
Gemini Investors was a private equity firm focused on small and lower middle market businesses. Gemini's target investment size was between $4 million and $6 million and a typical portfolio company had revenue of between $8 million and $30 million. In early 2010, Gemini was completing the investment of Gemini's Fund IV and it was deciding whether it should raise a fund sized similarly to their prior funds, or alternatively, raising a significantly larger fund.
Keywords: Private Equity;
Investment;
Investment Funds;
Markets;
Size;
Financial Services Industry;
United States;
Citation: Ruback, Richard S., and Royce Yudkoff. " Gemini Investors." Harvard Business School Case 211-066, September 2011. (Revised from original February 2011 version.)
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Case
| HBS Case Collection
|
2011
(Revised from original 2011 version)
Lind Equipment
Richard S. Ruback and Royce Yudkoff
Lind Equipment failed to meet its loan covenants with its senior bank lender in the summer of 2008, just six months after it was acquired. While the senior bank debt comprised only 6% of the capital used in the acquisition and was fully secured, it exercised its right to stop payments to Lind's subordinated lender that funded about 40% of the acquisition, pushing that debt into default as well. These financial problems were the result of declining revenues and profits at Lind as exchange rates and the impact of the Great Recession took its toll on the firm. Without a quick solution, Lind could be pushed into bankruptcy.
Keywords: Financial Condition;
Borrowing and Debt;
Capital;
Revenue;
Financing and Loans;
Financial Strategy;
Financial Management;
Acquisition;
Financial Crisis;
Currency Exchange Rate;
Insolvency and Bankruptcy;
Manufacturing Industry;
Industrial Products Industry;
Citation: Ruback, Richard S., and Royce Yudkoff. "Lind Equipment." Harvard Business School Case 212-012, August 2011. (Revised from original August 2011 version.)
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Case
| HBS Case Collection
|
2012
(Revised from original 2011 version)
National Public Broadcasting
Richard S. Ruback and Royce Yudkoff
Bob Williams, the CEO of National Public Broadcasting (NPB), was considering an unsolicited offer to purchase the company in the early spring of 2006. The company was a media underwriting representative for public television and radio stations throughout the United States. When Mr. Williams and his wife Linda Williams started NPB in 1996, they had imagined that it would grow quickly and be acquired by a larger media representation firm in a few years. But the business proved to be more complex than they had anticipated with slower growth and less interest from strategic acquirers and, as a result, Mr. Williams had been running NPB ever since. The unsolicited offer gave the Williams and their partners the potential opportunity to realize a significant cash payment for the business. The case explores the impact on the sale of the ownership structure decisions that were made when NPB was formed and the complexity of the sales process for small businesses.
Keywords: Mergers and Acquisitions;
Decision Choices and Conditions;
Financial Management;
Ownership;
Advertising Industry;
Media and Broadcasting Industry;
Citation: Ruback, Richard S., and Royce Yudkoff. " National Public Broadcasting." Harvard Business School Case 211-058, July 2012. (Revised from original January 2011 version.)
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Case
| HBS Case Collection
|
2011
(Revised from original 2011 version)
Greg Mazur and the Purchase of Great Eastern Premium Pet Foods
Richard S. Ruback and Royce Yudkoff
Greg Mazur decided to purchase a small business after graduating from the Harvard Business School. The case explores his decision about whether or not he should finalize his deal to purchase Great Eastern Premium Pet Foods, Inc. ("GEPP"). It gives students the opportunity to consider his search process, his due diligence about the company, his post-purchase plans, his valuation analysis and the structure of the potential transaction.
Keywords: Mergers and Acquisitions;
Entrepreneurship;
Financing and Loans;
Negotiation Deal;
Negotiation Preparation;
Strategic Planning;
Valuation;
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Case
| HBS Case Collection
|
2012
(Revised from original 2011 version)
Nashton Partners and its Search Fund Process
Richard S. Ruback and Royce Yudkoff
Nashton Partners was a search fund founded by two HBS MBA's that raised $500,000 to finance a search for a company that they could purchase and then run for the next five to ten years. The case examines the search fund structure, the two-year search, and two potential acquisitions.
Keywords: Mergers and Acquisitions;
Capital Structure;
Financing and Loans;
Investment Funds;
Partners and Partnerships;
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Case
| HBS Case Collection
|
2011
(Revised from original 2011 version)
Marlin & Associates and the Sale of Riverview Technologies
Richard S. Ruback and Royce Yudkoff
Riverview Technologies was a Stockholm, Sweden-based company that had developed software hedge funds. After spending more than a year in an organized sale process, the winning bidder had become increasingly difficult to work with and the closing had been substantially delayed. Despite the late stage of the process, the selling shareholders were considering walking away.
Keywords: Mergers and Acquisitions;
Entrepreneurship;
Negotiation Deal;
Negotiation Offer;
Negotiation Process;
Financial Services Industry;
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Case
| HBS Case Collection
|
2011
(Revised from original 2011 version)
Red Hen Baking Company
Richard S. Ruback and Royce Yudkoff
In 2007, the Red Hen Baking Company was deciding whether to move from its cramped and inefficient facility to a new facility. It had been in business about 8 years, and 2006 was the first year RHB realized a profit that was over $50,000. The added annual cost of the new location was about $58,000 and would require a $300,000 build-out. While the owner of Red Hen was excited about the possibility of a new, efficient bakery, he wondered if it was worth the added expense and risk.
Keywords: Entrepreneurship;
Capital;
Risk Management;
Expansion;
Citation: Ruback, Richard S., and Royce Yudkoff. " Red Hen Baking Company." Harvard Business School Case 211-091, May 2011. (Revised from original March 2011 version.)
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Case
| HBS Case Collection
|
2013
(Revised from original 2010 version)
Triple Point Technology
Richard S. Ruback and Royce Yudkoff
The founding CEO of Triple Point Technology, Peter Armstrong, was considering the sale of the company. The company specialized in providing its clients with software used for transaction processing and risk management in various commodity markets. Triple Point Technology had grown substantially in its 13 years of existence and potentially was a source of a significant amount of wealth for its owners. The sale was prompted by a co-founder who wanted to sell his share of the business. The case explores the rationale for owners to monetize at least a portion of their company's value, the sales process, and compares two different offers from the perspective of the company's executives that will have a significant continuing interest in it.
Keywords: Business Exit or Shutdown;
Private Equity;
Financial Management;
Negotiation Offer;
Sales;
Valuation;
Citation: Ruback, Richard S., and Royce Yudkoff. " Triple Point Technology." Harvard Business School Case 211-057, January 2013. (Revised from original December 2010 version.)
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Case
| HBS Case Collection
|
2012
(Revised from original 2011 version)
Talismark
Richard S. Ruback and Royce Yudkoff
Talismark, which helped its customers manage their waste, was considering re-engineering its business fundamentals to dramatically increase profitability by changing its sales and information processes. Implementing the changes would be expensive and would interrupt its new customer acquisition efforts, and it would be 18 months until the company could begin to acquire new business. The case explores the rationale and consequences of re-engineering a business.
Keywords: Transition;
Decision Choices and Conditions;
Profit;
Growth and Development;
Information Management;
Business Processes;
Organizational Change and Adaptation;
Sales;
Utilities Industry;
Citation: Ruback, Richard S., and Royce Yudkoff. " Talismark." Harvard Business School Case 211-097, July 2012. (Revised from original April 2011 version.)
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Case
| HBS Case Collection
|
2011
(Revised from original 2011 version)
Next Street, LLC
Richard S. Ruback and Royce Yudkoff
Next Street Financial, LLC was a modern merchant bank that provided high quality advisory services and capital to small- and mid-sized inner city businesses. Next Street was a for-profit business that aimed to increase the growth, profitability and success of its client companies, thereby enhancing economic development, wealth and job creation in the inner city. The advisory component of its mission seemed well underway but raising a fund to directly finance client companies had proved challenging. As Next Street considered expanding its capacity to help clients achieve their growth potential, the firm was deciding between raising a fund or focusing its resources on expanding its abilities to more effectively help its clients obtain financing from other institutions.
Keywords: Development Economics;
Entrepreneurship;
Capital;
Commercial Banking;
Investment Funds;
Urban Development;
Financial Services Industry;
Citation: Ruback, Richard S., and Royce Yudkoff. " Next Street, LLC." Harvard Business School Case 211-094, March 2011. (Revised from original March 2011 version.)
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Case
| HBS Case Collection
|
2011
Businesses for Sale by Briggs Capital, 2010
Richard S. Ruback and Royce Yudkoff
Briggs Capital was a regional mergers and acquisitions advisory firm that helped owners to sell their small firms. The case presents a company that was for sale in the fall of 2010 - a troubled manufacturer of post and beam style homes and log homes. Using the actual information that was available to potential buyers, students evaluate the potential acquisition.
Keywords: Mergers and Acquisitions;
Business Exit or Shutdown;
Entrepreneurship;
Financial Condition;
Investment;
Financial Services Industry;
Boston;
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Case
| HBS Case Collection
|
2011
ALAC International
Richard S. Ruback and Royce Yudkoff
ALAC was a small importer of specialty industrial chemicals. The case explores the different financing alternatives to facilitate the company's explosive growth in working capital. At the end of 2009, the company was awarded the United States distributorship for the specialty chemical di-isononyl phthalate (DINP) from a large Taiwanese producer and had almost tripled its sales in 2010. It expected to double its sales in 2011 and to dramatically increase its profits. ALAC critically needed to obtain financing for the explosive growth in its inventory and accounts receivable balances.
Keywords: Working Capital;
Growth Management;
Financing and Loans;
Chemical Industry;
Citation: Ruback, Richard S., and Royce Yudkoff. " ALAC International." Harvard Business School Case 211-065, February 2011.
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Case
| HBS Case Collection
|
2009
(Revised from original 2007 version)
Clear Channel 2006
Richard S. Ruback and Leslie Pierson
The Board of Directors of Clear Channel Communications, a radio broadcasting and outdoor advertising company, has to respond to a revised proposal from two private equity firms to take the company private. In November of 2006, the Board had unanimously approved an offer of $37.60 per share after going through intense negotiations with numerous firms, but institutional shareholders had indicated that they would reject this offer. In light of this recent news, the two private equity firms had come back to the Board with a revised offer. Now the Board must decide if it thinks the new proposal will satisfy the institutional shareholders, one of which is an activist hedge fund.
Keywords: Decision Choices and Conditions;
Private Equity;
Governing and Advisory Boards;
Negotiation Offer;
Privatization;
Business and Shareholder Relations;
Citation: Ruback, Richard S., and Leslie Pierson. " Clear Channel 2006." Harvard Business School Case 208-083, March 2009. (Revised from original November 2007 version.)
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Case
| HBS Case Collection
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2009
(Revised from original 2008 version)
The Restructuring of Daiei
Richard S. Ruback
In 2004, the Industrial Revitalization Corporation of Japan (IRCJ) was given the task of restructuring Daiei, one of the largest Japanese retailers and the country's most prominent zombie companies. The IRCJ was a government-sponsored organization that was funded with 50 billion yen in equity capital and 10 trillion yen of government - guaranteed funds. Daiei presented the IRCJ with a unique opportunity to demonstrate the effectiveness of its restructuring strategy which would require a significant write-down of Daiei's bank debts, substantial store closures and workforce reductions, and sufficient new private equity capital to help reposition and revitalize Daiei's retail operations. Overcoming these hurdles in a large and visible company like Daiei would be an important accomplishment for the IRCJ. But, failure, too, would have far reaching consequences.
Keywords: Restructuring;
Capital Structure;
Private Equity;
Performance Effectiveness;
Retail Industry;
Japan;
Citation: Ruback, Richard S. " The Restructuring of Daiei." Harvard Business School Case 209-060, January 2009. (Revised from original November 2008 version.)
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Case
| HBS Case Collection
|
2008
(Revised from original 2007 version)
DW Healthcare Partners
Richard S. Ruback
Keywords: Health Industry;
Citation: Ruback, Richard S. " DW Healthcare Partners." Harvard Business School Case 208-005, August 2008. (Revised from original October 2007 version.)
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Case
| HBS Case Collection
|
2008
(Revised from original 2007 version)
ABRY Fund V
Nabil N. El-Hage, Richard S. Ruback and Leslie Pierson
In January 2006, Andrew Banks and Royce Yudkoff were considering raising a 5th fund for their media-focused private equity firm, ABRY Partners. ABRY had a strong track record that the co-founders attributed to their group's deep knowledge of the media industry and relationships with media lenders, coupled with a client-service approach to working with Limited Partners. For the fund, Banks and Yudkoff had intended to raise $1 billion and continue their existing strategy, but potential Limited Partners had indicated that they would be willing to commit up to $4 billion. Banks and Yudkoff had to decide whether or not to quadruple the capital in their latest fund.
Keywords: Cooperative Ownership;
Venture Capital;
Customer Relationship Management;
Asset Management;
Private Equity;
Judgments;
Competitive Strategy;
Media;
Corporate Finance;
Media and Broadcasting Industry;
Financial Services Industry;
Citation: El-Hage, Nabil N., Richard S. Ruback, and Leslie Pierson. " ABRY Fund V." Harvard Business School Case 208-027, March 2008. (Revised from original July 2007 version.)
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Case
| HBS Case Collection
|
2006
Clearwire Corporation
Richard S. Ruback
Explores Clearwire's decision to fund its substantial capital investments through an initial public offering (IPO) or through private equity. Clearwire is developing and deploying a broadband wireless network using WiMAX technology. It had filed a registered statement for its IPO when the alternative of funding through strategic investments by Intel and Motorola became a possibility.
Keywords: Private Equity;
Wireless Technology;
Technological Innovation;
Initial Public Offering;
Investment Portfolio;
Telecommunications Industry;
Citation: Ruback, Richard S. "Clearwire Corporation." Harvard Business School Case 207-065, October 2006.
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Case
| HBS Case Collection
|
2006
(Revised from original 1989 version)
RJR Nabisco
Richard S. Ruback
Gives students the opportunity to explore issues facing the board of directors in a leveraged buyout. RJR Nabisco is valued under different operating strategies and the source of gains in leveraged buyouts is stressed.
Keywords: Leveraged Buyouts;
Profit;
Operations;
Problems and Challenges;
Strategy;
Valuation;
Citation: Ruback, Richard S. " RJR Nabisco." Harvard Business School Case 289-056, August 2006. (Revised from original May 1989 version.)
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Class Lecture
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2004
Know Your Worth: Critical Valuations That Work
Richard S. Ruback
Keywords: Valuation;
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Teaching Note
| HBS Case Collection
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2004
Sampa Video, Inc. (TN)
Richard S. Ruback and Peter Tufano
Teaching Note to (9-201-094).
Keywords: Service Operations;
Service Delivery;
Projects;
Valuation;
Financing and Loans;
Strategy;
Cost of Capital;
Service Industry;
Citation: Ruback, Richard S., and Peter Tufano. " Sampa Video, Inc. (TN)." Harvard Business School Teaching Note 204-125, February 2004.
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Case
| HBS Case Collection
|
2004
(Revised from original 2003 version)
Carol Brewer's Investments
Richard S. Ruback and Julia Stevens
Following her husband's death in 1994, Carol Brewer took over the management of her family's investments. This case describes the decisions Brewer made during this process, including her choice to seek active account management, her selection of an investment firm, and her determination of asset allocation within her portfolio. In 2003, Brewer is reassessing her previous investment choices and considering changes she might need to make in the future in light of her plans to retire in six years and live on the income from her investments.
Keywords: Investment Funds;
Investment Portfolio;
Retirement;
Decision Choices and Conditions;
Financial Management;
Personal Finance;
Investment Banking;
Investment Return;
Citation: Ruback, Richard S., and Julia Stevens. " Carol Brewer's Investments." Harvard Business School Case 204-017, January 2004. (Revised from original July 2003 version.)
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Case
| HBS Case Collection
|
2004
(Revised from original 2003 version)
Giant Cinema
Malcolm P. Baker, Richard S. Ruback, Erik Stafford and Kathleen Luchs
The owner of Giant Cinema must decide whether to invest in a digital projector, a new technology for screening films, or purchase a traditional projector. The impact of the new technology is uncertain, and the case describes probabilities for different outcomes that students can incorporate in the financial analysis of the proposed project.
Keywords: Entrepreneurship;
Film Entertainment;
Technology Adoption;
Financial Strategy;
Investment;
Outcome or Result;
Risk and Uncertainty;
Technology;
Entertainment and Recreation Industry;
Citation: Baker, Malcolm P., Richard S. Ruback, Erik Stafford, and Kathleen Luchs. " Giant Cinema." Harvard Business School Case 204-052, January 2004. (Revised from original September 2003 version.)
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Case
| HBS Case Collection
|
2003
(Revised from original 2000 version)
Dell's Working Capital
Richard S. Ruback and Aldo Sesia
Dell Computer Corp. manufactures, sells, and services personal computers. The company markets its computers directly to its customers and builds computers after receiving a customer order. This build-to-order model enables Dell to have much smaller investment in working capital than its competitors. It also enables Dell to more fully enjoy the benefits of reduction in component prices and to introduce new products more quickly. Dell has grown quickly and has been able to finance that growth internally by its efficient use of working capital and its profitability. This case highlights the importance of working capital management in a rapidly growing firm.
Keywords: Financial Management;
Working Capital;
Manufacturing Industry;
Computer Industry;
Citation: Ruback, Richard S., and Aldo Sesia. " Dell's Working Capital." Harvard Business School Case 201-029, December 2003. (Revised from original August 2000 version.)
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Case
| HBS Case Collection
|
2003
(Revised from original 2001 version)
Eskimo Pie Corporation (Abridged)
Richard S. Ruback
In early 1991, Reynolds Metals, the makers of aluminum products, decided to sell its holding of Eskimo Pie, a marketer of branded frozen novelties. Reynolds had an offer from Nestle to acquire Eskimo Pie. However, Reynolds decided instead to make an initial public offering of Eskimo Pie shares.
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Case
| HBS Case Collection
|
2003
(Revised from original 2001 version)
Whirlpool Europe
Richard S. Ruback, Sudhakar Balachandran and Aldo Sesia
This case presents a capital budgeting problem. Whirlpool Europe is evaluating an investment in an enterprise resource planning (ERP) system that would reorganize the information flow throughout the company. Students derive the cash flows from working capital, sales, and other improvements along with the cost of the investment.
Keywords: Working Capital;
Cash Flow;
Investment;
Capital Budgeting;
Consumer Products Industry;
Europe;
Citation: Ruback, Richard S., Sudhakar Balachandran, and Aldo Sesia. " Whirlpool Europe." Harvard Business School Case 202-017, December 2003. (Revised from original November 2001 version.)
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Teaching Note
| HBS Case Collection
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2003
(Revised from original 2002 version)
Whirlpool Europe, TN
Richard S. Ruback
Teaching Note for (9-202-017).
Keywords: Consumer Products Industry;
Europe;
Citation: Ruback, Richard S. " Whirlpool Europe, TN." Harvard Business School Teaching Note 202-124, December 2003. (Revised from original May 2002 version.)
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Case
| HBS Case Collection
|
2003
(Revised from original 2003 version)
Managing a 401(k) Fund
Richard S. Ruback and Kathleen Luchs
Focuses on an individual's decision to participate in his firm's 401(k) plan and how to invest his contributions. Plan participants have a choice of 10 mutual funds with different investment strategies. Includes data from Morningstar on the composition and performance of the different funds and information on different asset allocation strategies provided by the fund administrator, T. Rowe Price.
Keywords: Investment Funds;
Investment;
Saving;
Asset Management;
Financial Management;
Decision Making;
Personal Finance;
Financial Services Industry;
Citation: Ruback, Richard S., and Kathleen Luchs. " Managing a 401(k) Fund." Harvard Business School Case 204-077, December 2003. (Revised from original October 2003 version.)
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Teaching Note
| HBS Case Collection
|
2003
Pharmacyclics: Financing Research and Development (TN)
Malcolm P. Baker and Richard S. Ruback
Teaching Note for (9-201-056).
Keywords: Pharmaceutical Industry;
Medical Devices and Supplies Industry;
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Case
| HBS Case Collection
|
2003
(Revised from original 2001 version)
Pharmacyclics: Financing Research & Development
Malcolm P. Baker, Richard S. Ruback and Aldo Sesia
Pharmacyclics (NASDAQ: PCYC), a pharmaceutical company that manufactures products that will improve existing therapeutic treatments for cancer, arteriosclerosis, and retinal disease, was considering a $60 million private placement in February 2000. The company had more cash than ever before, but projections of R&D and marketing expenses were also unprecedented. PCYC's most promising oncology drug, a radiation enhancer called Xcytrin, was in Phase III clinical trials--the rigorous final phase before FDA approval for commercialization. Analysts gave the drug a slightly better than 50% chance of success. This case focuses on stage financing and a simple decision-tree evaluation. Students have the opportunity to consider the impact of past staged financing decisions on the ownership structure of the firm and to evaluate the current stock market price in light of analyst forecasts of the cash flow and the probability of success for each drug. These two analyses help inform the private placement decision.
Keywords: Decision Making;
Research and Development;
Commercialization;
Cash Flow;
Financing and Loans;
Health Care and Treatment;
Business Startups;
Equity;
Financial Strategy;
Corporate Finance;
Pharmaceutical Industry;
Medical Devices and Supplies Industry;
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Case
| HBS Case Collection
|
2003
(Revised from original 2000 version)
Radio One, Inc.
Richard S. Ruback and Pauline M Fischer
Radio One (NYSE: ROIA and RIOAK), the largest radio group targeting African-Americans in the country, had the opportunity to acquire 12 urban stations in the top 50 markets from Clear Channel Communications, Inc. (NYSE: CCU) in the winter of 2000. The stations were being sold by Clear Channel Communications, Inc. to obtain Federal Communications Commission (FCC) approval for its acquisition of AMFM, Inc. (NYSE: AFM). Radio One was also negotiating the acquisition of nine stations in Charlotte, North Carolina, Augusta, Georgia, and Indianapolis, Indiana. The proposed acquisitions would double the size of Radio One. The case focuses on the strategic and financial evaluation of the proposed acquisitions.
Keywords: Negotiation;
Valuation;
Race Characteristics;
Financial Strategy;
Mergers and Acquisitions;
Media and Broadcasting Industry;
North Carolina;
Georgia (state, US);
Indiana;
United States;
Citation: Ruback, Richard S., and Pauline M Fischer. " Radio One, Inc." Harvard Business School Case 201-025, May 2003. (Revised from original September 2000 version.)
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Case
| HBS Case Collection
|
2003
(Revised from original 2000 version)
Merck & Company: Evaluating a Drug Licensing Opportunity
Richard S. Ruback and David B Krieger
This explores the valuation of an opportunity to license a compound before it enters clinical trials. Describes Merck's decision tree evaluation process is presented. Information required to evaluate a specific licensing opportunity is provided, including the costs of the three phases of the review process, the revenues if approved, and the probability of various outcomes. It includes an introduction to decision tree analysis and valuation.
Keywords: Decision Making;
Cost vs Benefits;
Opportunities;
Valuation;
Outcome or Result;
Pharmaceutical Industry;
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Teaching Note
| HBS Case Collection
|
2003
(Revised from original 2000 version)
Health Development Corporation TN
Richard S. Ruback
Teaching Note for (9-200-049).
Keywords: Health Industry;
Boston;
Citation: Ruback, Richard S. " Health Development Corporation TN." Harvard Business School Teaching Note 201-030, January 2003. (Revised from original August 2000 version.)
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Teaching Note
| HBS Case Collection
|
2003
(Revised from original 1997 version)
Eskimo Pie Corporation TN
Richard S. Ruback
Teaching Note for (9-293-084).
Keywords: Food and Beverage Industry;
Citation: Ruback, Richard S. " Eskimo Pie Corporation TN." Harvard Business School Teaching Note 297-073, January 2003. (Revised from original January 1997 version.)
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Case
| HBS Case Collection
|
2003
(Revised from original 2000 version)
Health Development Corporation
Richard S. Ruback
Health Development Corp. (HDC) owns and operates health clubs in the Greater Boston area. HDC engaged a local investment banker to explore a sale of the company. The most likely buyer views HDC's prior purchase of real estate as a negative. HDC's management is convinced the purchase enhanced value, and a discounted cash flow analysis confirms that it was a substantially positive net present value decision. Nevertheless, the real estate reduces the valuation according to the approach used by the potential buyer. The challenge is to structure a transaction that allows HDC to realize its full value.
Keywords: Cash Flow;
Property;
Business Exit or Shutdown;
Valuation;
Value;
Decisions;
Health Industry;
Boston;
Citation: Ruback, Richard S. " Health Development Corporation." Harvard Business School Case 200-049, January 2003. (Revised from original May 2000 version.)
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Supplement
| HBS Case Collection
|
2002
(Revised from original 2000 version)
Radio One Inc.
Richard S. Ruback
Citation: Ruback, Richard S. " Radio One Inc." Harvard Business School Spreadsheet Supplement 201-706, May 2002. (Revised from original October 2000 version.)
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Supplement
| HBS Case Collection
|
2002
(Revised from original 2001 version)
Whirlpool Europe
Richard S. Ruback
Citation: Ruback, Richard S. " Whirlpool Europe." Harvard Business School Spreadsheet Supplement 202-711, May 2002. (Revised from original November 2001 version.)
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Teaching Note
| HBS Case Collection
|
2002
(Revised from original 2001 version)
Radio One Inc. TN
Richard S. Ruback
Teaching Note for (9-201-025).
Keywords: Media and Broadcasting Industry;
North Carolina;
Georgia (state, US);
Indiana;
United States;
Citation: Ruback, Richard S. " Radio One Inc. TN." Harvard Business School Teaching Note 201-027, February 2002. (Revised from original April 2001 version.)
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Supplement
| HBS Case Collection
|
2001
(Revised from original 2001 version)
Eskimo Pie Corporation (Abridged)
Richard S. Ruback
Spreadsheet to (9-202-037). Download only.
Citation: Ruback, Richard S. " Eskimo Pie Corporation (Abridged)." Harvard Business School Spreadsheet Supplement 202-701, December 2001. (Revised from original September 2001 version.)
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Teaching Note
| HBS Case Collection
|
2001
(Revised from original 2000 version)
Dell's Working Capital TN
Richard S. Ruback and Aldo Sesia
Teaching Note for (9-201-029).
Keywords: Computer Industry;
Manufacturing Industry;
Citation: Ruback, Richard S., and Aldo Sesia. " Dell's Working Capital TN." Harvard Business School Teaching Note 201-017, October 2001. (Revised from original September 2000 version.)
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Teaching Note
| HBS Case Collection
|
2001
(Revised from original 2001 version)
Tree Values TN
Richard S. Ruback and Kathleen Luchs
Teaching Note for (9-201-031).
Keywords: Forestry Industry;
Citation: Ruback, Richard S., and Kathleen Luchs. " Tree Values TN." Harvard Business School Teaching Note 202-018, October 2001. (Revised from original September 2001 version.)
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Teaching Note
| HBS Case Collection
|
2001
(Revised from original 2001 version)
Merck & Company: Evaluating A Drug Licensing Opportunity TN
Richard S. Ruback and Aldo Sesia
Teaching Note for (9-201-023).
Keywords: Service Industry;
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Case
| HBS Case Collection
|
2001
(Revised from original 1992 version)
Eskimo Pie Corporation
Richard S. Ruback
In early 1991, Reynolds Metals, the makers of aluminum products, decided to sell its holding of Eskimo Pie, a marketer of branded frozen novelties. Reynolds had an offer from Nestle to acquire Eskimo Pie. However, Reynolds decided instead to make an initial public offering of Eskimo Pie shares. The case analyzes this decision.
Keywords: Initial Public Offering;
Decisions;
Mergers and Acquisitions;
Performance Productivity;
Leadership;
Corporate Entrepreneurship;
Expansion;
Ownership;
Food and Beverage Industry;
Manufacturing Industry;
Citation: Ruback, Richard S. " Eskimo Pie Corporation." Harvard Business School Case 293-084, August 2001. (Revised from original November 1992 version.)
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Supplement
| HBS Case Collection
|
2001
Merck & Company: Evaluating a Drug Licensing Opportunity
Richard S. Ruback
Spreadsheet to (9-201-023). Download only.
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Supplement
| HBS Case Collection
|
2001
(Revised from original 2000 version)
Health Development Corporation
Richard S. Ruback and Julia Stevens
Citation: Ruback, Richard S., and Julia Stevens. " Health Development Corporation." Harvard Business School Spreadsheet Supplement 201-702, April 2001. (Revised from original September 2000 version.)
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Supplement
| HBS Case Collection
|
2001
Pharmacyclics: Financing Research and Development
Richard S. Ruback
Spreadsheet to (9-201-056). Presents exhibits 2, 3, 4, 9, 10, and 11. Download only.
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Case
| HBS Case Collection
|
2000
Tree Values
Richard S. Ruback and Kathleen Luchs
Describes two alternative tree cutting strategies. The first is to cut all trees that are at least 12 inches in diameter at breast height. The second is to thin the forest by cutting less desirable trees immediately and harvesting the crop trees later. The case presents information for students to estimate the cash flows for each alternative. After estimating the corresponding cash flows, students have the opportunity to use discounted cash flow techniques to decide when to cut trees under each strategy and to select which strategy maximizes the value of the forest.
Keywords: Strategy;
Decision Making;
Cash Flow;
Decision Choices and Conditions;
Management Practices and Processes;
Value Creation;
Forestry Industry;
Citation: Ruback, Richard S., and Kathleen Luchs. " Tree Values." Harvard Business School Case 201-031, October 2000.
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Supplement
| HBS Case Collection
|
2000
Tree Values
Richard S. Ruback
Citation: Ruback, Richard S. " Tree Values." Harvard Business School Spreadsheet Supplement 201-710, October 2000.
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Supplement
| HBS Case Collection
|
2000
Be Our Guest, Inc.
Richard S. Ruback and Indra Reinbergs
Citation: Ruback, Richard S., and Indra Reinbergs. " Be Our Guest, Inc." Harvard Business School Spreadsheet Supplement 201-701, September 2000.
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Case
| HBS Case Collection
|
2000
(Revised from original 1993 version)
Kochman, Reidt + Haigh, Inc.
Richard S. Ruback and Roy Burstin
A small company faces the dilemma of how to finance growth (i.e., internally generated cash flows vs. outside financing sources). An innovative concept positions the company in promoting a niche within the kitchen-cabinet industry and in looking for an optimal way of leveraging that concept for fast growth.
Keywords: Cash Flow;
Business Growth and Maturation;
Entrepreneurship;
Corporate Finance;
Growth and Development Strategy;
Consumer Products Industry;
Utilities Industry;
Citation: Ruback, Richard S., and Roy Burstin. " Kochman, Reidt + Haigh, Inc." Harvard Business School Case 294-056, June 2000. (Revised from original December 1993 version.)
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Case
| HBS Case Collection
|
1998
(Revised from original 1989 version)
Marriott Corporation: The Cost of Capital (Abridged)
Richard S. Ruback
Gives students the opportunity to explore how a company uses the Capital Asset Pricing Model (CAPM) to compute the cost of capital for each of its divisions. The use of Weighted Average Cost of Capital (WACC) formula and the mechanics of applying it are stressed.
Keywords: Cost of Capital;
Mathematical Methods;
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Case
| HBS Case Collection
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1998
(Revised from original 1998 version)
Marriott Corporation: The Cost of Capital
Richard S. Ruback
Presents recommendations for hurdle rates of Marriott's divisions to select by discounting appropriate cash flows by the appropriate hurdle rate for each division.
Keywords: Cost of Capital;
Asset Pricing;
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Teaching Note
| HBS Case Collection
|
1998
(Revised from original version)
Marriott Corp.: The Cost of Capital, Teaching Note
Richard S. Ruback
Teaching Note for (9-298-101).
Keywords: Cost of Capital;
Accommodations Industry;
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Teaching Note
| HBS Case Collection
|
1998
Marriott Corporation: The Cost of Capital (Abridged), Teaching Note
Richard S. Ruback
Teaching Note for (9-289-047).
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Case
| HBS Case Collection
|
1997
(Revised from original version)
Southland Corp. (A)
Richard S. Ruback
Examines the Thompson's $4.9 billion leveraged buyout of the Southland Corp. in 1987. As the original founders of Southland, the Thompsons were concerned about losing control over the company upon learning of the Belzberg family's acquiring interest. The teaching objectives are: to explore the characteristics of an LBO candidate, to examine the dynamics of the corporate control process when insiders are substantial stockholders, and therefore serve as both buyer and seller, and to evaluate the cash flow forecasts in an LBO and use them to analyze bidding behavior.
Keywords: Leveraged Buyouts;
Governance Controls;
Corporate Governance;
Bids and Bidding;
Valuation;
Forecasting and Prediction;
Management Analysis, Tools, and Techniques;
Strategy;
Cash Flow;
Citation: Ruback, Richard S. " Southland Corp. (A)." Harvard Business School Case 291-038, December 1997. (Revised from original April 1991 version.)
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Case
| HBS Case Collection
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1996
(Revised from original 1996 version)
Chrysler Takeover Attempt, The
Richard S. Ruback and William DeWitt
On April 12, 1995, Kirk Kerkorian made an unsolicited offer to buy the outstanding shares of Chrysler Corp. This case analyzes the proposed deal and addresses the key contextual elements contributing to the takeover attempt.
Citation: Ruback, Richard S., and William DeWitt. " Chrysler Takeover Attempt, The." Harvard Business School Case 296-078, September 1996. (Revised from original February 1996 version.)
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Background Note
| HBS Case Collection
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1995
(Revised from original 1995 version)
Introduction to Cash Flow Valuation Methods
Richard S. Ruback
Provides an introduction to three cash flow valuation methods. The three methods differ in their measure of cash flows and the discount rate applied to those cash flows. The names for the three methods correspond to the type of cash flow that is used in the valuation: Equity Cash Flow (ECF), Capital Cash Flow (CCF), and Free Cash Flow (FCF). The three methods provide consistent valuations when applied correctly.
Keywords: Cash Flow;
Valuation;
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Background Note
| HBS Case Collection
|
1995
(Revised from original version)
A Note on Capital Cash Flow Valuation
Richard S. Ruback
Presents the capital cash flow method for valuing risky cash flows. In this method cash flows are calculated to include the benefits of interest tax shields. In a capital structure, with just ordinary debt and common equity, capital cash flows equal the flows available to equity--net income plus depreciation less capital expenditure and the change in working capital--plus the cash interest paid to bondholders. The interest tax shields decrease taxable income and thereby increase cash flows. Since the interest tax shields are included in the cash flows, a before-tax interest rate that corresponds to the riskiness of the assets is appropriate to value the capital cash flows.
Keywords: Capital;
Cash Flow;
Valuation;
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Case
| HBS Case Collection
|
1994
(Revised from original 1989 version)
Philip Morris Companies and Kraft, Inc.
Richard S. Ruback
Gives students the opportunity to explore the effect of substantial free cash flow on corporate acquisition and operating strategies. Students are also given the opportunity to extract information from the common stock prices of the participating firms. A variety of valuation techniques are employed to assess the plausibility of a restructuring plan.
Keywords: Cash Flow;
Strategic Planning;
Acquisition;
Strategy;
Restructuring;
Valuation;
Stocks;
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Case
| HBS Case Collection
|
1994
(Revised from original 1991 version)
Southland Corp. (B)
Richard S. Ruback
Examines Southland's financial difficulties following the LBO in 1987 up to the first restructuring plan in July 1990. The teaching objectives are: to explore the complexities of a failed leverage buyout and the operating restrictions that result from financial distress, to recognize that financing decisions can restrict future flexibility, to examine the dynamics of a restructuring with particular focus on the role of new equity, and the payoffs received by pre-existing claimholders, and to explain the complexity of accomplishing a restructuring outside of bankruptcy.
Keywords: Leveraged Buyouts;
Restructuring;
Equity;
Insolvency and Bankruptcy;
Financing and Loans;
Crisis Management;
Citation: Ruback, Richard S. " Southland Corp. (B)." Harvard Business School Case 291-039, July 1994. (Revised from original April 1991 version.)
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Case
| HBS Case Collection
|
1993
(Revised from original version)
Southland Corp. (C)
Richard S. Ruback
Examines pre-packaged bankruptcy of Southland.
Keywords: Insolvency and Bankruptcy;
Citation: Ruback, Richard S. " Southland Corp. (C)." Harvard Business School Case 292-004, December 1993. (Revised from original November 1991 version.)
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Teaching Note
| HBS Case Collection
|
1992
(Revised from original version)
Philip Morris Companies and Kraft, Inc., Teaching Note
Richard S. Ruback
Teaching Note for (9-289-045).
Keywords: Food and Beverage Industry;
Agriculture and Agribusiness Industry;
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Teaching Note
| HBS Case Collection
|
1992
(Revised from original version)
RJR Nabisco, Teaching Note
Richard S. Ruback
Teaching Note for (9-289-056).
Keywords: Food and Beverage Industry;
Agriculture and Agribusiness Industry;
Citation: Ruback, Richard S. " RJR Nabisco, Teaching Note." Harvard Business School Teaching Note 289-057, January 1992. (Revised from original June 1989 version.)
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Teaching Note
| HBS Case Collection
|
1992
Gulf Oil Corporation-Takeover TN
Richard S. Ruback
Teaching Note for (9-285-053).
Keywords: Privatization;
Business Exit or Shutdown;
Bids and Bidding;
Natural Environment;
Energy Industry;
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Teaching Note
| HBS Case Collection
|
1992
Congoleum Corporation (Abridged) TN
Richard S. Ruback
Teaching Note for (9-287-029).
Keywords: Leveraged Buyouts;
Valuation;
Equity;
Manufacturing Industry;
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Teaching Note
| HBS Case Collection
|
1992
O.M. Scott & Sons Company TN, The
Richard S. Ruback
Teaching Note for (9-209-102).
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Teaching Note
| HBS Case Collection
|
1992
American Telephone and Telegraph Company (1983) TN
Richard S. Ruback
Teaching Note for (9-284-047).
Keywords: Financing and Loans;
Equity;
Value;
Management Practices and Processes;
Decisions;
Telecommunications Industry;
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Teaching Note
| HBS Case Collection
|
1992
MCI Communications Corporation (1983) TN
Richard S. Ruback
Teaching Note for (9-284-057).
Keywords: Financing and Loans;
Growth and Development Strategy;
Debt Securities;
Risk and Uncertainty;
Monopoly;
Communications Industry;
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Case
| HBS Case Collection
|
1991
Pioneer Petroleum Corp.
Richard S. Ruback
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.
Keywords: Cost of Capital;
Energy Industry;
Mining Industry;
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Teaching Note
| HBS Case Collection
|
1990
(Revised from original version)
Interest Rate Exercises, Teaching Note
Richard S. Ruback
Keywords: Interest Rates;
Citation: Ruback, Richard S. "Interest Rate Exercises, Teaching Note." Harvard Business School Teaching Note 289-051, April 1990. (Revised from original March 1989 version.)
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Exercise
|
1990
(Revised from original version)
Interest Rate Exercises
Richard S. Ruback
Keywords: Interest Rates;
Citation: Ruback, Richard S. " Interest Rate Exercises." Harvard Business School Exercise 289-050, April 1990. (Revised from original March 1989 version.)
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Other Unpublished Work
| 2000
Does Corporate Quality Matter?
R. M. McLauglin, R. S. Ruback and H. Tehranian
Keywords: Quality;
Reputation;
Citation: McLauglin, R. M., R. S. Ruback, and H. Tehranian. "Does Corporate Quality Matter?" NBER Working Paper Series Series, November 2000.
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Mimeo
| 2000
Capital Cash Flows: A Simple Approach to Valuing Risky Cash Flows
R. S. Ruback
Keywords: Cash Flow;
Capital;
Valuation;
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Other Unpublished Work
| 1999
Estimating Industry Multiples
Malcolm Baker and R. S. Ruback
We analyze industry multiples for the S&P 500 in 1995. We use Gibbs sampling to estimate simultaneously the error specification and small sample minimum variance multiples for 22 industries. In addition, we consider the performance of four common multiples: the simple mean, the harmonic mean, the value-weighted mean, and the median. The harmonic mean is a close approximation to the Gibbs minimum variance estimates. Finally, we show that EBITDA is a better single basis of substitutability than EBIT or revenue in the industries that we examine.
Keywords: Management Analysis, Tools, and Techniques;
Performance;
Mathematical Methods;
Research Summary
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Research Summary
Corporate Control and Valuation
by
Richard S. Ruback
Richard S. Ruback's research and course development focus on applied corporate finance-in particular, corporate control transactions and valuation. His research on corporate control has yielded case studies on major transactions, such as the RJR Nabisco leveraged buyout, and their consequences (examined in a three-case series on Southland Corporation, owner of the 7-Eleven convenience-store chain). It includes a study (with Paul Healy and Krishna G. Palepu) that examines the postmerger performance and determinants of the long-term financial success of large merged firms. Ruback's work on valuation has produced a series of cases that highlight effective valuation tools and the consequences of their use. It includes a study (with Steven Kaplan) of how cash flow forecasts are valued in capital markets.
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