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Teaching Note
| HBS Case Collection
|
2013
Tombstones (TN)
Timothy A. Luehrman
This case consists primarily of excerpts from term sheets and prospectuses for six securities offerings made by US companies during 2009-2010, just after the financial crisis and recession of 2008-09. There are three issues of senior unsecured notes, one floating rate note, one equity offering, and one convertible note. The issuers are Microsoft, Coca Cola Enterprises, Norfolk Southern, IBM, Ford Motor, and Cephalon.
Citation:
Luehrman, Timothy A. "
Tombstones (TN)." Harvard Business School Teaching Note 213-085, January 2013.
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Teaching Note
| HBS Case Collection
|
2012
Stryker Corporation: Capital Budgeting (TN)
Timothy A. Luehrman
This case examines some parts of Stryker Corporation's systems and procedures for approving and authorizing capital spending of many different types, including buildings, machinery, and working capital for existing businesses, as well as transactions with third parties such as acquisitions, joint ventures, and licensing agreements. The case is set in early 2007, nearly two years after significant modifications in these systems and procedures. Stryker has compiled a remarkable track record of consistently high growth in profitability over more than 20 years. The modifications to its capital budgeting procedures are partly intended to support the company's efforts to continue this success.
Keywords: capital budgeting;
capital expenditures-equipment;
capital expenditures-machinery;
valuation;
internal rate of return;
discounted cash flows;
net present value;
Cost of Capital;
Valuation;
Cash Flow;
System;
Organizational Culture;
Policy;
Business Processes;
Capital Budgeting;
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Case
| HBS Case Collection
|
2012
(Revised from original 2011 version)
Tombstones
Timothy A. Luehrman and David Lane
This case consists primarily of excerpts from term sheets and prospectuses for six securities offerings made by US companies during 2009-2010, just after the financial crisis and recession of 2008-09. There are three issues of senior unsecured notes, one floating rate note, one equity offering, and one convertible note. The issuers are Microsoft, Coca Cola Enterprises, Norfolk Southern, IBM, Ford Motor, and Cephalon.
Keywords: Financial Crisis;
Equity;
Debt Securities;
Bonds;
Motivation and Incentives;
United States;
Citation:
Luehrman, Timothy A., and David Lane. "
Tombstones." Harvard Business School Case 211-063, September 2012. (Revised from original January 2011 version.)
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Teaching Note
| HBS Case Collection
|
2011
Magna International, Inc. (TN) (A) and (B)
Timothy A. Luehrman and Yuhai Xuan
Teaching Note for 211044.
Keywords: Manufacturing Industry;
Auto Industry;
Canada;
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Supplement
| HBS Case Collection
|
2011
(Revised from original 2010 version)
Magna International, Inc. (A) (CW)
Timothy A. Luehrman and Yuhai Xuan
Magna International, Inc., a Canadian-based automotive parts manufacturer, is considering whether and how to unwind its dual-class ownership structure. A family trust controlled by the founder owns a 0.65% economic interest in the company but has 66% of the votes via a super-voting class of shares. Officers of the company are considering how to fashion a transaction that will end the family's control and win the approval of both classes of shareholders. The Magna (A) case asks the students to weigh the costs and benefits of dual-class ownership and the best way to convert to single-class. The Magna (B) case describes the proposal that Magna's board put to a shareholder vote. Students are asked to evaluate it and decide whether they would approve it.
Keywords: Cost vs Benefits;
Voting;
Governance Controls;
Market Transactions;
Production;
Ownership;
Business and Shareholder Relations;
Value Creation;
Auto Industry;
Manufacturing Industry;
Canada;
Citation:
Luehrman, Timothy A., and Yuhai Xuan. "
Magna International, Inc. (A) (CW)." Harvard Business School Spreadsheet Supplement 211-707, April 2011. (Revised from original November 2010 version.)
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Case
| HBS Case Collection
|
2011
(Revised from original 2010 version)
Magna International, Inc. (A)
Timothy A. Luehrman and Yuhai Xuan
Magna International, Inc., a Canadian-based automotive parts manufacturer, is considering whether and how to unwind its dual-class ownership structure. A family trust controlled by the founder owns a 0.65% economic interest in the company but has 66% of the votes via a super-voting class of shares. Officers of the company are considering how to fashion a transaction that will end the family's control and win the approval of both classes of shareholders. The Magna (A) case asks the students to weigh the costs and benefits of dual-class ownership and the best way to convert to single-class. The Magna (B) case describes the proposal that Magna's board put to a shareholder vote. Students are asked to evaluate it and decide whether they would approve it.
Keywords: Family Business;
Restructuring;
Cost vs Benefits;
Governance Controls;
Ownership Stake;
Family Ownership;
Auto Industry;
Canada;
Citation:
Luehrman, Timothy A., and Yuhai Xuan. "
Magna International, Inc. (A)." Harvard Business School Case 211-044, April 2011. (Revised from original November 2010 version.)
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Case
| 2010
New Heritage Doll Company: Capital Budgeting (TN)
Timothy A. Luehrman
Keywords: Capital Budgeting;
Manufacturing Industry;
Citation:
Luehrman, Timothy A. "New Heritage Doll Company: Capital Budgeting (TN)." Harvard Business Publishing Case, 2010.
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Case
| 2010
New Heritage Doll Company: Capital Budgeting: Brief Case No. 4213.
Timothy A. Luehrman and Heide Abelli
Keywords: Capital Budgeting;
Manufacturing Industry;
Citation:
Luehrman, Timothy A., and Heide Abelli. "New Heritage Doll Company: Capital Budgeting: Brief Case No. 4213." Watertown, MA: Harvard Business Publishing Case, 2010.
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Simulation
| 2010
Finance Simulation: Capital Budgeting: Product No. 3357.
Timothy A. Luehrman
In this single-player simulation, students act as members of the Capital Committee of New Heritage Doll Company, tasked with selecting and allocating capital across the company's three divisions. Students evaluate a diverse set of competing investment proposals and make decisions regarding 27 separate proposals over a five-year period. Students confront a range of project types including replacement investments, expansion investments, investments in mutually exclusive projects, interdependent projects, and projects with growth options. To evaluate them, students examine outlays, cash flow patterns, and common metrics such as NPV, IRR, and Payback, with or without capital constraints. This simulation is appropriate for introductory Finance courses as well as specialized courses in Project Finance, Capital Budgeting, Advanced Corporate Finance, and Accounting. May be appropriate for Strategy and General Management courses in which the topic of resource allocation is explored. This simulation can be used in advanced undergraduate, MBA, and executive education programs.
Keywords: Decisions;
Resource Allocation;
Business Divisions;
Accounting;
Investment;
Performance Evaluation;
Projects;
Capital Budgeting;
Corporate Finance;
Citation:
Luehrman, Timothy A. "Finance Simulation: Capital Budgeting: Product No. 3357." Simulation and Teaching Note. Watertown, MA: Harvard Business Publishing, 2010. Electronic.
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Simulation
| 2010
Finance Simulation: Capital Budgeting, Facilitator's Guide: Product No. 4046.
Timothy A. Luehrman
Keywords: Capital Budgeting;
Citation:
Luehrman, Timothy A. "Finance Simulation: Capital Budgeting, Facilitator's Guide: Product No. 4046." Simulation and Teaching Note. Watertown, MA: Harvard Business Publishing, 2010.
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Supplement
| HBS Case Collection
|
2010
Magna International, Inc. (B)
Timothy A. Luehrman and Yuhai Xuan
Magna International, Inc., a Canadian-based automotive parts manufacturer, is considering whether and how to unwind its dual-class ownership structure. A family trust controlled by the founder owns a 0.65% economic interest in the company but has 66% of the votes via a super-voting class of shares. Officers of the company are considering how to fashion a transaction that will end the family's control and win the approval of both classes of shareholders. The Magna (A) case asks the students to weigh the costs and benefits of dual-class ownership and the best way to convert to single-class. The Magna (B) case describes the proposal that Magna's board put to a shareholder vote. Students are asked to evaluate it and decide whether they would approve it.
Keywords: Business and Shareholder Relations;
Value Creation;
Voting;
Family Ownership;
Cost;
Cost vs Benefits;
Stock Shares;
Governance Controls;
Governing and Advisory Boards;
Manufacturing Industry;
Auto Industry;
Canada;
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Case
| HBS Case Collection
|
2010
(Revised from original 2008 version)
Tribune Company, 2007
Timothy A. Luehrman and Eric Seth Gordon
This case describes the proposed acquisition of Tribune Company by Sam Zell in 2007. Tribune Company is one of the largest newspapers and broadcasting companies in the United States. Zell's proposed acquisition is unusual in several respects. It is two-tiered, employs an ESOP as the acquisition vehicle, involves a high degree of leverage as well as the significant asset sales, and Zell himself will own almost no common stock in the post-deal Tribune. The case is set in late October 2007, at which point the first stage of the acquisition has been completed but the second stage has not. Recent deterioration in both Tribune's operating results and credit market conditions make it unclear whether the transaction can be closed as scheduled in 2007, or indeed at all.
Keywords: Mergers and Acquisitions;
Financial Markets;
Employee Stock Ownership Plan;
Negotiation Offer;
Journalism and News Industry;
Publishing Industry;
Citation:
Luehrman, Timothy A., and Eric Seth Gordon. "
Tribune Company, 2007." Harvard Business School Case 208-148, October 2010. (Revised from original May 2008 version.)
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Case
| HBS Case Collection
|
2010
New Heritage Doll Company
Timothy A. Luehrman and Heide Abelli
A manufacturer and retailer of specialty doll products must decide which of two projects to fund. The decision requires the student to compute cash flows for the 2 projects, discount values to the present and compare and contrast different project performance measures.
Keywords: Forecasting;
capital budgeting;
Resource management;
Resource Allocation;
Forecasting and Prediction;
Capital Budgeting;
Manufacturing Industry;
Consumer Products Industry;
Retail Industry;
Citation:
Luehrman, Timothy A., and Heide Abelli. "
New Heritage Doll Company." Harvard Business School Brief Case 104-212, September 2010.
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Teaching Note
| HBS Case Collection
|
2010
New Heritage Doll Company (Brief Case)
Timothy A. Luehrman and Heide Abelli
Teaching Note for 4212.
Keywords: Forecasting;
capital budgeting;
Resource management;
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Supplement
| HBS Case Collection
|
2010
New Heritage Doll Company, Spreadsheet Supplement (Brief Case)
Timothy A. Luehrman and Heide Abelli
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Supplement
| HBS Case Collection
|
2010
New Heritage Doll Company, Faculty Spreadsheet Supplement (Brief Case)
Timothy A. Luehrman and Heide Abelli
Keywords: Forecasting;
capital budgeting;
Resource management;
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Case
| 2010
New Heritage Doll Company: Capital Budgeting: Brief Case No. 4212.
Timothy A. Luehrman and Heide Diener Abelli
A manufacturer and retailer of specialty doll products must decide which of two projects to fund. The decision requires the student to compute cash flows for the 2 projects, discount values to the present and compare and contrast different project performance measures.
Keywords: Capital Budgeting;
Projects;
Decision Making;
Cash Flow;
Performance Evaluation;
Production;
Citation:
Luehrman, Timothy A., and Heide Diener Abelli. "New Heritage Doll Company: Capital Budgeting: Brief Case No. 4212." Watertown, MA: Harvard Business Publishing Case, 2010.
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Case
| HBS Case Collection
|
2010
Groupe Ariel S.A.: Parity Conditions and Cross-Border Valuation
Timothy A. Luehrman and James Quinn
Groupe Ariel evaluates a proposal from its Mexican subsidiary to purchase and install cost-saving equipment at a manufacturing facility in Monterrey. The improvements will allow the plant to automate recycling and remanufacturing of toner and printer cartridges, an important part of Ariel's business in many markets. Ariel corporate policy requires a discounted cash flow (DCF) analysis and an estimate for the net present value (NPV) for capital expenditures in foreign markets. A major challenge for the analysis is deciding which currency to use, the Euro or the peso. The case introduces techniques of discounted cash flow valuation analysis in a multi-currency setting and can be used to teach basic international parity conditions related to the value of operating cash flows.
Keywords: capital budgeting;
Exchange rates;
Securities analysis;
Project evaluation;
International Finance;
Debt Securities;
Currency Exchange Rate;
Cash Flow;
Capital Budgeting;
Europe;
Mexico;
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Teaching Note
| HBS Case Collection
|
2010
Groupe Ariel S.A.: Parity Conditions and Cross-Border Valuation (Brief Case)
Timothy A. Luehrman and James Quinn
Teaching Note for 4194
Keywords: capital budgeting;
Exchange rates;
Securities analysis;
Project evaluation;
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Supplement
| HBS Case Collection
|
2010
Groupe Ariel S.A.: Parity Conditions and Cross-Border Valuation, Spreadsheet Supplement (Brief Case)
Timothy A. Luehrman and James Quinn
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Supplement
| HBS Case Collection
|
2010
Groupe Ariel S.A.: Parity Conditions and Cross-Border Valuation, Faculty Spreadsheet (Brief Case)
Timothy A. Luehrman and James Quinn
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Case
| 2010
Groupe Ariel, S.A.: Parity Conditions and Cross-Border Valuation: Brief Case.
Timothy A. Luehrman and James Quinn
Groupe Ariel evaluates a proposal from its Mexican subsidiary to purchase and install cost-saving equipment at a manufacturing facility in Monterrey. The improvements will allow the plant to automate recycling and remanufacturing of toner and printer cartridges, an important part of Ariel's business in many markets. Ariel corporate policy requires a discounted cash flow (DCF) analysis and an estimate for the net present value (NPV) for capital expenditures in foreign markets. A major challenge for the analysis is deciding which currency to use, the Euro or the peso. The case introduces techniques of discounted cash flow valuation analysis in a multi-currency setting and can be used to teach basic international parity conditions related to the value of operating cash flows.
Keywords: Cross-Cultural and Cross-Border Issues;
Valuation;
Business Subsidiaries;
Policy;
Cash Flow;
Management Analysis, Tools, and Techniques;
International Finance;
Problems and Challenges;
Production;
Currency;
Manufacturing Industry;
Mexico;
Citation:
Luehrman, Timothy A., and James Quinn. "Groupe Ariel, S.A.: Parity Conditions and Cross-Border Valuation: Brief Case." Watertown, MA: Harvard Business Publishing Case, 2010.
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Case
| 2010
Groupe Ariel, S.A.: Parity Conditions and Cross-Border Valuation: Brief Case No. 4195 (TN).
Timothy A. Luehrman and James Quinn
Keywords: Valuation;
Currency Exchange Rate;
Cross-Cultural and Cross-Border Issues;
Citation:
Luehrman, Timothy A., and James Quinn. "Groupe Ariel, S.A.: Parity Conditions and Cross-Border Valuation: Brief Case No. 4195 (TN)." Watertown, MA: Harvard Business Publishing Case, 2010.
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Background Note
| HBS Case Collection
|
2009
Business Valuation and the Cost of Capital
Timothy A. Luehrman
This note is an introduction to the cost of capital as used in discounted cash flow valuation analyses. The note covers basic financial economic principles and practical problems encountered in calculating the cost of capital, especially WACC. It concludes with cautionary advice about computing and applying WACC. The note is suitable for undergraduates, MBAs and executives studying basic cases on business valuation and capital budgeting.
Keywords: Economics;
Capital Budgeting;
Cash Flow;
Cost of Capital;
Valuation;
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Case
| HBS Case Collection
|
2009
Blaine Kitchenware, Inc.: Capital Structure
Timothy A. Luehrman and Joel L. Heilprin
Keywords: Capital Structure;
Consumer Products Industry;
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Teaching Note
| HBS Case Collection
|
2009
Blaine Kitchenware, Inc.: Capital Structure (Brief Case)
Timothy A. Luehrman and Joel L. Heilprin
Teaching Note for 4040
Keywords: finance;
capital structure;
financial strategy;
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Supplement
| HBS Case Collection
|
2009
Blaine Kitchenware, Inc.: Capital Structure, Spreadsheet Supplement for Instructors (Brief Case)
Timothy A. Luehrman and Joel L. Heilprin
Keywords: finance;
capital structure;
financial strategy;
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Supplement
| HBS Case Collection
|
2009
Blaine Kitchenware, Inc.: Capital Structure, Spreadsheet Supplement (Brief Case)
Timothy A. Luehrman and Joel L. Heilprin
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Case
| 2009
Blaine Kitchenware, Inc.: Capital Structure: Brief Case No. 4040.
Timothy A. Luehrman and Joel L. Heilprin
A diversified mid-sized manufacturer of kitchen tools contemplates a stock repurchase in response to an unsolicited takeover. The company must analyze its debt capacity and optimal capital structure,while considering associated changes in firm value and stock price. The case is designed to teach Miller-Modigliani conditions, M-M Proposition 1, and the static-tradeoff model of optimal capital structure involving interest tax shields and costs of financial distress.
Keywords: Capital Structure;
Financial Strategy;
Interest Rates;
Taxation;
Stocks;
Consumer Products Industry;
Citation:
Luehrman, Timothy A., and Joel L. Heilprin. "Blaine Kitchenware, Inc.: Capital Structure: Brief Case No. 4040." Harvard Business Publishing Case, 2009.
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Case
| 2009
Blaine Kitchenware, Inc.: Capital Structure (TN): Brief Case.
Timothy A. Luehrman and Joel L. Heilprin
Keywords: Capital Structure;
Financial Strategy;
Interest Rates;
Taxation;
Stocks;
Consumer Products Industry;
Citation:
Luehrman, Timothy A., and Joel L. Heilprin. "Blaine Kitchenware, Inc.: Capital Structure (TN): Brief Case." Watertown, MA: Harvard Business Publishing Case, 2009.
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Teaching Note
| HBS Case Collection
|
2009
Mercury Athletic: Valuing the Opportunity (Brief Case)
Timothy A. Luehrman and Joel L. Heilprin
Teaching Note to 4050.
Keywords: Mergers ＆ Acquisitions;
valuation;
Sensitivity analysis;
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Supplement
| HBS Case Collection
|
2009
Mercury Athletic: Valuing the Opportunity Teaching Note Exhibits, Faculty Spreadsheet Supplement (Brief Case)
Timothy A. Luehrman and Joel L. Heilprin
Keywords: Mergers ＆ Acquisitions;
valuation;
Sensitivity analysis;
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Background Note
| HBS Case Collection
|
2012
(Revised from original 1994 version)
Note on Valuing Equity Cash Flows
Timothy A. Luehrman
A technical note for advanced students on the topic of valuing highly-levered equity. Introduces the "equity cash flow" valuation methodology, shows how to use it, discusses the sources and signs of its built-in biases, and provides some guidance about when to use it.
Keywords: Cash Flow;
Equity;
Valuation;
Citation:
Luehrman, Timothy A. "
Note on Valuing Equity Cash Flows." Harvard Business School Background Note 295-085, September 2012. (Revised from original December 1994 version.)
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Case
| 2009
Mercury Athletic Footwear, Inc.: Valuing the Opportunity: Brief Case No. 4050.
Timothy A. Luehrman and Joel L. Heilprin
In January 2007, West Coast Fashions, Inc., a large designer and marketer of branded apparel, announced a strategic reorganization that would result in the divestiture of their wholly owned footwear subsidiary, Mercury Athletic. John Liedtke, the head of business development for Active Gear, a mid-sized athletic and casual footwear company, saw the potential acquisition of Mercury as a unique opportunity to roughly double the size of his business. The case uses the potential acquisition of Mercury Athletic as a vehicle to teach students basic DCF (discounted cash flow) valuation using the weighted average cost of capital (WACC).
Keywords: Mergers and Acquisitions;
Restructuring;
Valuation;
Apparel and Accessories Industry;
Citation:
Luehrman, Timothy A., and Joel L. Heilprin. "Mercury Athletic Footwear, Inc.: Valuing the Opportunity: Brief Case No. 4050." Watertown, MA: Harvard Business Publishing Case, 2009.
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Case
| 2009
Mercury Athletic Footwear, Inc.: Valuing the Opportunity (TN): Brief Case No. 4051.
Timothy A. Luehrman and Joel L. Heilprin
Keywords: Mergers and Acquisitions;
Restructuring;
Valuation;
Apparel and Accessories Industry;
Citation:
Luehrman, Timothy A., and Joel L. Heilprin. "Mercury Athletic Footwear, Inc.: Valuing the Opportunity (TN): Brief Case No. 4051." Watertown, MA: Harvard Business Publishing Case, 2009.
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Teaching Note
| HBS Case Collection
|
2009
Real Options Exercises (TN)
Timothy A. Luehrman
Teaching Note for [208045].
Keywords: Corporate Strategy;
Decision Choices and Conditions;
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Teaching Note
| HBS Case Collection
|
2009
Stryker Corporation: In-sourcing PCBs (TN)
Timothy A. Luehrman
Teaching Note for [207121].
Keywords: Investment;
Capital Budgeting;
Valuation;
Investment Return;
Mathematical Methods;
Medical Devices and Supplies Industry;
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Case
| HBS Case Collection
|
2009
Midland Energy Resources, Inc.: Cost of Capital
Timothy A. Luehrman and Joel L. Heilprin
The senior vice president of project finance for a global oil and gas company must determine the weighted average cost of capital for the company as a whole and each of its divisions as part of the annual capital budgeting process. The case uses comparable companies to estimate asset betas for each operating division, and employs the Capital Asset Pricing Model to determine the cost of equity. Students are required to un-lever and re-lever betas and, choose an appropriate risk-free rate, and compute costs of debt and equity.
Keywords: Cash flow;
capital structure;
valuation;
Risk assessment;
Risk and Uncertainty;
Valuation;
Cash Flow;
Capital Structure;
Energy Sources;
Energy Industry;
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Teaching Note
| HBS Case Collection
|
2009
Midland Energy Resources, Inc.: Cost of Capital (Brief Case)
Timothy A. Luehrman and Joel L. Heilprin
Teaching Note for 4129
Keywords: Cash flow;
capital structure;
valuation;
Risk assessment;
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Supplement
| HBS Case Collection
|
2009
Midland Energy Resources, Inc.: Cost of Capital, Spreadsheet for Students (Brief Case)
Timothy A. Luehrman and Joel L. Heilprin
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Supplement
| HBS Case Collection
|
2009
Midland Energy Resources, Inc.: Cost of Capital, Instructors Spreadsheet (Brief Case)
Timothy A. Luehrman and Joel L. Heilprin
Keywords: Cash flow;
capital structure;
valuation;
Risk assessment;
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Case
| 2009
Midland Energy Resources, Inc.: Cost of Capital: Brief Case No. 4129.
Timothy A. Luehrman and Joel L. Heilprin
The senior vice president of project finance for a global oil and gas company must determine the weighted average cost of capital for the company as a whole and each of its divisions as part of the annual capital budgeting process. The case uses comparable companies to estimate asset betas for each operating division, and employs the Capital Asset Pricing Model to determine the cost of equity. Students are required to un-lever and re-lever betas and, choose an appropriate risk-free rate, and compute costs of debt and equity.
Keywords: Capital Budgeting;
Cost of Capital;
Energy Industry;
Citation:
Luehrman, Timothy A., and Joel L. Heilprin. "Midland Energy Resources, Inc.: Cost of Capital: Brief Case No. 4129." Watertown, MA: Harvard Business Publishing Case, 2009.
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Case
| 2009
Midland Energy Resources, Inc.: Cost of Capital (TN): Brief Case.
Timothy A. Luehrman and Joel L. Heilprin
Finance, Capital Asset Pricing Model (CAPM), Weighted Average Cost of Capital (WACC), Capital Structure, Risk Assessment, Corporate Finance, Cash Flow, Valuation, Beta, North America, Energy, Oil and Gas, Cost of Capital, Cost of Equity, Discount Rate, Risk Premium, Market Risk Premium, Discounted Cash Flow (DCF) Teaching Note for 4129
Keywords: Capital Budgeting;
Cost of Capital;
Energy Industry;
Citation:
Luehrman, Timothy A., and Joel L. Heilprin. "Midland Energy Resources, Inc.: Cost of Capital (TN): Brief Case." Watertown, MA: Harvard Business Publishing Case, 2009.
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Teaching Note
| HBS Case Collection
|
2009
Nextel Partners: Put Option (TN)
Timothy A. Luehrman
Teaching Note for [207-128]
Keywords: Business and Shareholder Relations;
Voting;
Price;
Public Ownership;
Valuation;
Financial Liquidity;
Stock Options;
Management Practices and Processes;
Telecommunications Industry;
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Simulation
| 2009
Finance Simulation: M&A in Wine Country: No. 3289.
Timothy A. Luehrman and W. Carl Kester
In this simulation, students play the role of CEO at one of three publicly-traded wine producers: Starshine, Bel Vino, or International Beverage. Each player evaluates merger and/or acquisition opportunities among the three companies and then determines reservation prices, values targets, and negotiates over deal terms before deciding whether to accept or reject final offers. Each company's stock price reacts to the bidding activity, and all bids are public, creating a competitive and fast-paced negotiation environment. The simulation contains a built-in chat feature, allowing students to negotiate privately online. Ideal as a capstone experience in a first-year MBA finance course. Students should have exposure to the fundamentals of finance before playing. Also suitable for elective courses in Finance, Negotiation and Strategy. Minimum technical specifications: Computer with minimum 1024x768 screen resolution, High speed internet connection (DSL / cable modem quality), Windows 2000, XP, or Vista / Macintosh operating systems, Internet Explorer 6+ / Firefox 2.0+ web browser with javascript and cookies enabled, Flash Player 9+ browser plug-in, Microsoft Excel (optional but several simulations allow students to export data for manipulation in Excel).
Keywords: Mergers and Acquisitions;
Negotiation;
Valuation;
Value Creation;
Food and Beverage Industry;
Agriculture and Agribusiness Industry;
Citation:
Luehrman, Timothy A., and W. Carl Kester. "Finance Simulation: M&A in Wine Country: No. 3289." Simulation and Teaching Note. Watertown, MA: Harvard Business Publishing, 2009. Electronic.
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Simulation
| 2009
Finance Simulation: M&A in Wine Country (Facilitator's Guide)
Timothy A. Luehrman, W. Carl Kester and Heide Diener Abelli
Keywords: Mergers and Acquisitions;
Negotiation;
Valuation;
Value Creation;
Food and Beverage Industry;
Agriculture and Agribusiness Industry;
Citation:
Luehrman, Timothy A., W. Carl Kester, and Heide Diener Abelli. "Finance Simulation: M&A in Wine Country (Facilitator's Guide)." Simulation and Teaching Note. Watertown, MA: Harvard Business Publishing, 2009.
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Case
| HBS Case Collection
|
2009
(Revised from original 2007 version)
The Hertz Corporation (B)
Timothy A. Luehrman and Douglas Scott
Keywords: Transportation Industry;
Travel Industry;
Citation:
Luehrman, Timothy A., and Douglas Scott. "
The Hertz Corporation (B)." Harvard Business School Case 208-031, January 2009. (Revised from original October 2007 version.)
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Case
| HBS Case Collection
|
2009
(Revised from original 2005 version)
Wabash Music, Inc.
Timothy A. Luehrman
Wabash Music, Inc. is contemplating an acquisition outside its core music business as a way of diversifying and developing cash for unexpected commercial success.
Keywords: Mergers and Acquisitions;
Music Entertainment;
Cash;
Diversification;
Citation:
Luehrman, Timothy A. "
Wabash Music, Inc." Harvard Business School Case 205-088, January 2009. (Revised from original March 2005 version.)
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Background Note
| HBS Case Collection
|
2009
(Revised from original 2005 version)
Corporate Valuation and Market Multiples
Timothy A. Luehrman
Provides a basic introduction to the use of market multiples for business valuation. Explains the method's reliance on the Law of One Price, sets forth the basic steps for using the method, and reviews some practical issues arising in its application.
Keywords: Business Ventures;
Price;
Market Transactions;
Mathematical Methods;
Valuation;
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Case
| HBS Case Collection
|
2009
(Revised from original 2007 version)
Stryker Corporation: In-sourcing PCBs
Timothy A. Luehrman
This case examines a proposed investment in the capability to manufacture printed circuit boards (PCBs) in-house rather than buying them from third-party contract manufacturers. Stryker Corporation's Instruments business is considering the proposal in response to difficulties with existing suppliers. The case requires students to formulate and execute basic quantitative capital budgeting analyses, specifically, to compute net present value (NPV) internal rate of return (IRR) and payback period.
Keywords: Competency and Skills;
Capital Budgeting;
Investment;
Investment Return;
Production;
Valuation;
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Case
| HBS Case Collection
|
2009
(Revised from original 2007 version)
Nextel Partners: Put Option
Timothy A. Luehrman and Douglas Scott
Nextel Partners' shareholders have voted to exercise a put option that will require the company's largest shareholder, Sprint Nextel Corp., to purchase all the shares it does not already own. However, the put option does not stipulate a price to be paid, but rather a process involving third-party appraisers, who will set the sale price. This is so even though Nextel Partners is a publicly traded company. Raises issues regarding the definition and determination of "fair market value" and permits discussion of topics such as control premia, discounts for illiquidity, and possible departures by the stock price from "fair market value."
Keywords: Mergers and Acquisitions;
Stock Options;
Price;
Public Ownership;
Valuation;
Citation:
Luehrman, Timothy A., and Douglas Scott. "
Nextel Partners: Put Option." Harvard Business School Case 207-128, January 2009. (Revised from original June 2007 version.)
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Case
| HBS Case Collection
|
2009
(Revised from original 2007 version)
Stryker Corporation: Capital Budgeting
Timothy A. Luehrman
Examines some parts of Stryker Corporation's systems and procedures for approving and authorizing capital spending of many different types, including buildings, machinery, and working capital for existing businesses, as well as transactions with third parties such as acquisitions, joint ventures, and licensing agreements. Set in early 2007, nearly two years after significant modifications in these systems and procedures. Stryker has compiled a remarkable track record of consistently high growth in profitability over more than 20 years. The modifications to its capital-budgeting procedures are partly intended to support the company's efforts to continue this success.
Keywords: Working Capital;
System;
Organizational Culture;
Policy;
Capital Budgeting;
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Case
| HBS Case Collection
|
2009
(Revised from original 2007 version)
The Hertz Corporation (A)
Timothy A. Luehrman and Douglas Scott
Examines the leveraged buyout of Hertz in 2005, a complex, high-profile deal and a good example of cutting-edge practice in private equity. The first of a two-part series on the Hertz LBO, adopts the perspective of Clayton, Dubilier & Rice, the leader of a private equity consortium bidding to buy Hertz from Ford in an auction. Set at the final round of the auction, the immediate problem for the consortium is how much to raise its previous bid. A reasonable bid must be based upon how much value the private equity consortium can create through improvements in Hertz's global operations on the one hand, and a more efficient capital structure on the other. Presents detailed descriptive information on both topics, but does not include detailed financial projections, which must be formulated by students or supplied, for discussion purposes, by the instructor.
Keywords: Leveraged Buyouts;
Private Equity;
Bids and Bidding;
Negotiation Deal;
Valuation;
Value Creation;
Financial Services Industry;
United States;
Citation:
Luehrman, Timothy A., and Douglas Scott. "
The Hertz Corporation (A)." Harvard Business School Case 208-030, January 2009. (Revised from original October 2007 version.)
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Teaching Note
| HBS Case Collection
|
2009
(Revised from original 2008 version)
Finance: An Introductory Online Course
Timothy A. Luehrman
Teaching Note for 208719
Keywords: Finance;
Curriculum and Courses;
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Exercise
|
2009
(Revised from original 2007 version)
Real Options Exercises
Timothy A. Luehrman
Introduces students to simple forms and solution techniques for real options found in corporate settings. Revised versions of problems appearing in an older problem set (293-095). The basic differences are that the new set is shorter, but also a bit more demanding.
Keywords: Capital Budgeting;
Valuation;
Citation:
Luehrman, Timothy A. "
Real Options Exercises." Harvard Business School Exercise 208-045, January 2009. (Revised from original August 2007 version.)
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Teaching Note
| HBS Case Collection
|
2009
The Hertz Corporation (B) (TN)
Timothy A. Luehrman
Teaching Note to [208031].
Keywords: Leveraged Buyouts;
Private Equity;
Restructuring;
Valuation;
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Simulation
| 2009
Finance Simulation: Blackstone/Celanese: No. 3712.
Nabil N. El-Hage and Timothy A. Luehrman
The Finance Simulation: Blackstone/Celanese is based on the landmark acquisition of Celanese AG by the Blackstone Group in 2003. Students play the role of either Celanese or Blackstone and conduct due diligence, establish deal terms, respond to bids and counter-bids, and consider interests of other stakeholders. The simulation offers chat functionality so that students can negotiate online in addition to in person. Topics covered include: various valuation methods including capital cash flow and equity cash flow methods, LBO Models, Deal Structuring/Financing, Due diligence, Mergers and Acquisitions strategy, and Negotiation.
Keywords: Bids and Bidding;
Finance;
Mergers and Acquisitions;
Valuation;
Leveraged Buyouts;
Negotiation;
Citation:
El-Hage, Nabil N., and Timothy A. Luehrman. "Finance Simulation: Blackstone/Celanese: No. 3712." Simulation and Teaching Note. Watertown, MA: Harvard Business Publishing, 2009.
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Simulation
| 2009
Finance Simulation: Blackstone/Celanese (Facilitator's Guide)
Nabil N. El-Hage, Timothy A. Luehrman and Heide Diener Abelli
Keywords: Bids and Bidding;
Finance;
Mergers and Acquisitions;
Valuation;
Leveraged Buyouts;
Negotiation;
Citation:
El-Hage, Nabil N., Timothy A. Luehrman, and Heide Diener Abelli. "Finance Simulation: Blackstone/Celanese (Facilitator's Guide)." Simulation and Teaching Note. Watertown, MA: Harvard Business Publishing, 2009.
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Teaching Note
| HBS Case Collection
|
2008
(Revised from original 2008 version)
The Hertz Corporation (A) (TN)
Timothy A. Luehrman
Teaching Note for [208030].
Keywords: Transportation Industry;
Citation:
Luehrman, Timothy A. "
The Hertz Corporation (A) (TN)." Harvard Business School Teaching Note 209-068, November 2008. (Revised from original October 2008 version.)
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Supplement
| HBS Case Collection
|
2008
The Hertz Corporation (A) Teaching Note Courseware
Timothy A. Luehrman
Keywords: Teaching;
Information;
Education;
Transportation Industry;
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Supplement
| HBS Case Collection
|
2008
Progressive Corporation: Variable Dividends (CW)
Timothy A. Luehrman and Brenda W. Chia
Keywords: Insurance Industry;
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Case
| HBS Case Collection
|
2008
Progressive Corporation: Variable Dividends
Timothy A. Luehrman and Brenda W. Chia
In 2006, Progressive Corporation announced a change in its dividend policy. Henceforth, dividends would be paid annually rather than quarterly and, more importantly, would be set according to a formula that would result in considerably greater year-to-year variability than was the case historically. Under the new policy, dividends would be tied to the company's underwriting results, its performance relative to predetermined goals, and a target payout ratio. Progressive's new policy was intended to help with overall capital management in the cyclical property and casualty insurance business.
Keywords: Capital Structure;
Policy;
Goals and Objectives;
Performance;
Business and Shareholder Relations;
Insurance Industry;
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Supplement
| HBS Case Collection
|
2008
(Revised from original 2007 version)
Stryker Corporation: In-sourcing PCBs Spreadsheet Supplement
Timothy A. Luehrman
Keywords: Accounting;
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Supplement
| HBS Case Collection
|
2008
Tribune Company, 2007 (CW)
Timothy A. Luehrman
This case describes the proposed acquisition of Tribune Company by Sam Zell in 2007. Tribune Company is one of the largest newspapers and broadcasting companies in the United States. Zell's proposed acquisition is unusual in several respects. It is two-tiered, employs an ESOP as the acquisition vehicle, involves a high degree of leverage as well as significant asset sales, and Zell himself will own almost no common stock in the post-deal Tribune. The case is set in late October 2007, at which point the first stage of the acquisition has been completed, but the second stage has not. Recent deterioration in both Tribune's operating results and credit market conditions make it unclear whether the transaction can be closed as scheduled in 2007, or indeed at all.
Keywords: Acquisition;
Credit;
Employee Stock Ownership Plan;
Employees;
Markets;
Market Transactions;
Negotiation Deal;
Business and Shareholder Relations;
Sales;
Perspective;
Journalism and News Industry;
United States;
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Tutorial
|
2008
Finance: An Introductory Online Course
Timothy A. Luehrman, Brenda W. Chia and Michelle Rendall
The Finance Online Course provides a fundamental understanding of the principles, analytical tools, and knowledge needed to make good investment and financing decisions. The course introduces students to finance ratios, forecasting methods, capital structure theory, and risk-return analysis and then asks them to apply these concepts in several different approaches to valuing a business. In the course, students consider purchasing a small family-owned business in northern California. Students work through a series of exercises to determine the value of the investment, analyze current financial conditions, and forecast the firm's likely performance based on different variables. Course topics are presented in an engaging format using narrated animations and videos. Self-correcting practice exercises and Microsoft Excel worksheets are included to reinforce the concepts. The course includes pre- and post-assessments.
Keywords: Business Finance;
Forecasting and Prediction;
Financial Management;
Management Analysis, Tools, and Techniques;
Capital Structure;
Risk Management;
Family Ownership;
Valuation;
Investment;
California;
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Supplement
| HBS Case Collection
|
2008
(Revised from original 2007 version)
The Hertz Corporation (A) courseware
Timothy A. Luehrman
Keywords: Education;
Transportation Industry;
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Supplement
| HBS Case Collection
|
2008
(Revised from original 2007 version)
The Hertz Corporation (B) courseware
Timothy A. Luehrman
Keywords: Education;
Transportation Industry;
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Supplement
| HBS Case Collection
|
2008
Nextel Partners: Put Option (CW)
Timothy A. Luehrman
Spreadsheet Supplement for [207128].
Keywords: Telecommunications Industry;
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Supplement
| HBS Case Collection
|
2007
Stryker Corporation: Capital Budgeting (CW)
Timothy A. Luehrman
Keywords: Capital Budgeting;
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Supplement
| HBS Case Collection
|
2007
Real Options Exercises (CW)
Timothy A. Luehrman
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Case
| HBS Case Collection
|
2007
(Revised from original 1992 version)
Kaiser Steel Corporation, 1987
Timothy A. Luehrman
Kaiser Steel entered Chapter 11 bankruptcy proceedings in early 1987. Nine months later it still faces several difficult obstacles to reorganization, including litigation, environmental liabilities, and pension and medical benefits for retired employees. Students are asked to propose a plan for reorganizing Kaiser, including a business plan, a confirmable allocation of assets and/or new securities, and specific steps to implement their proposals and bring the company out of Chapter 11. Addresses conflicts among claimants to a bankrupt firm and the obstacles and opportunities presented to each claimant by U.S. Chapter 11 bankruptcy rules. May be used with Note on Bankruptcy in the United States.
Keywords: Business Plan;
Insolvency and Bankruptcy;
Employee Relationship Management;
Resource Allocation;
Opportunities;
Conflict and Resolution;
Steel Industry;
United States;
Citation:
Luehrman, Timothy A. "
Kaiser Steel Corporation, 1987." Harvard Business School Case 293-019, March 2007. (Revised from original September 1992 version.)
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Case
| HBS Case Collection
|
2007
(Revised from original 1994 version)
Goodyear Tire & Rubber Company, 1986
Timothy A. Luehrman and Joanne C. Chng
Goodyear's transition to radial tires from bias and bias-belted tires was difficult and expensive, but successful. Afterward, in 1983, the company embarked on a major diversification program. Three years later, after investments exceeding $1 billion in oil and gas pipelines and reserves, Goodyear was attacked by a corporate "raider" and is considering abandoning its diversification program in favor of a highly leveraged restructuring.
Keywords: Restructuring;
Transition;
Investment;
Diversification;
Rubber Industry;
Citation:
Luehrman, Timothy A., and Joanne C. Chng. "
Goodyear Tire & Rubber Company, 1986." Harvard Business School Case 295-033, January 2007. (Revised from original October 1994 version.)
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Case
| 2004
Valuing Employee Stock Options
Timothy A. Luehrman
Keywords: Stock Options;
Valuation;
Compensation and Benefits;
Citation:
Luehrman, Timothy A. "Valuing Employee Stock Options." 2004. Electronic.
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Case
| HBS Case Collection
|
2003
(Revised from original 1993 version)
Texas High-Speed Rail Corporation
Timothy A. Luehrman
The finance director of the Texas High-Speed Rail Corp. (THSRC) is considering modifications to the financing program designed to support the development, construction, and operations of THSRC's planned high-speed rail system. The current plan achieves many objectives, including raising $6.5 billion from private sources, but a few problems remain to be addressed. These include temporary overfunding, unutilized tax losses, and certain important contingencies. Designed to highlight the shortcomings of simple valuation tools in a static analysis when applied to a dynamic project. The class discussion should isolate specific analytical issues, which may then be addressed in subsequent class sessions.
Keywords: Private Sector;
Financial Strategy;
Financing and Loans;
Taxation;
Management Analysis, Tools, and Techniques;
Strategic Planning;
Valuation;
Rail Industry;
Texas;
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Teaching Note
| HBS Case Collection
|
2003
Texas High-Speed Rail Corporation: FCF vs. ECF Valuation (TN)
Benjamin C. Esty and Timothy A. Luehrman
Teaching Note for (9-293-072).
Keywords: Rail Industry;
Texas;
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Case
| 2003
What's the True Cost of Your Capital?
Timothy A. Luehrman
Keywords: Cost of Capital;
Citation:
Luehrman, Timothy A. "What's the True Cost of Your Capital?" 2003. Electronic.
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Case
| HBS Case Collection
|
2001
(Revised from original 1991 version)
Jaguar plc--1989
Timothy A. Luehrman and Robert W. Lightfoot
Describes Jaguar's product market problems in 1989, and its attractiveness to GM and Ford as an acquisition target. Students are asked to evaluate the suitability of GM and Ford as business partners for Jaguar, and to determine how much each should be willing to pay to acquire part or all of Jaguar. They are also asked to formulate tactics for extracting the highest possible price from each bidder.
Keywords: Acquisition;
Markets;
Consumer Behavior;
Product;
Partners and Partnerships;
Valuation;
Auto Industry;
Citation:
Luehrman, Timothy A., and Robert W. Lightfoot. "
Jaguar plc--1989." Harvard Business School Case 291-034, June 2001. (Revised from original April 1991 version.)
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Teaching Note
| HBS Case Collection
|
1997
(Revised from original version)
MSDI-Alcala de Henares, Spain (TN)
Timothy A. Luehrman
Teaching Note for (9-289-029).
Keywords: Spain;
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Teaching Note
| HBS Case Collection
|
1996
(Revised from original 1995 version)
Arundel Partners: The Sequel Project (TN)
Timothy A. Luehrman
Teaching Note for (9-292-140).
Keywords: Motion Pictures and Video Industry;
California;
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Case
| HBS Case Collection
|
1996
(Revised from original version)
MW Petroleum Corporation (B)
Timothy A. Luehrman, Peter Tufano and Barbara Wall
Amoco Corp. is negotiating to sell a wholly-owned subsidiary, MW Petroleum, to Apache Corp. MW owns large reserves of oil and gas comprising many properties at different stages of engineering, development, and production. The proposed acquisition is a large one for Apache and poses several important financing and valuation problems. This case focuses on evaluation and execution of a creative financing structure that allows the buyer and seller to reallocate oil price risk.
Keywords: Business Subsidiaries;
Mergers and Acquisitions;
Risk Management;
Financing and Loans;
Mining Industry;
Energy Industry;
Citation:
Luehrman, Timothy A., Peter Tufano, and Barbara Wall. "
MW Petroleum Corporation (B)." Harvard Business School Case 295-045, April 1996. (Revised from original February 1995 version.)
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Case
| HBS Case Collection
|
1995
(Revised from original version)
MSDI-Alcala de Henares, Spain
Timothy A. Luehrman
Merck & Co., Inc. is evaluating a proposed cost-saving investment by its Spanish subsidiary. The case introduces techniques of discounted cash flow valuation analysis in a multicurrency setting. Can be used to teach basic international parity conditions as they relate to the value of operating cash flows.
Keywords: Business Subsidiaries;
Cash Flow;
Cost Management;
Currency;
Investment;
Management Analysis, Tools, and Techniques;
Valuation;
Spain;
Citation:
Luehrman, Timothy A. "
MSDI-Alcala de Henares, Spain." Harvard Business School Case 289-029, September 1995. (Revised from original January 1989 version.)
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Teaching Note
| HBS Case Collection
|
1995
Goodyear Tire & Rubber Company, 1988 (TN)
Timothy A. Luehrman
Teaching Note for (9-290-016).
Keywords: Rubber Industry;
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Teaching Note
| HBS Case Collection
|
1995
Goodyear Tire & Rubber Company, 1986 (TN)
Timothy A. Luehrman
Teaching Note for (9-295-033).
Keywords: Rubber Industry;
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Teaching Note
| HBS Case Collection
|
1995
BW/IP International, Inc. (TN)
Timothy A. Luehrman
Teaching Note for (9-293-058).
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Teaching Note
| HBS Case Collection
|
1995
Kaiser Steel Corporation, 1987 (TN)
Timothy A. Luehrman
Keywords: Steel Industry;
Citation:
Luehrman, Timothy A. "Kaiser Steel Corporation, 1987 (TN)." Harvard Business School Teaching Note 295-145, May 1995.
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Teaching Note
| HBS Case Collection
|
1995
Note on Valuing Equity Cash Flows (TN)
Timothy A. Luehrman
Teaching Note for (9-295-085).
Keywords: Cash Flow;
Valuation;
Equity;
Prejudice and Bias;
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Teaching Note
| HBS Case Collection
|
1995
Towle Manufacturing Company, 1986 (TN)
Timothy A. Luehrman
Teaching Note for (1-293-022).
Keywords: Manufacturing Industry;
United States;
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Case
| HBS Case Collection
|
1995
(Revised from original version)
Home Shopping Network, Inc. (Abridged)
Timothy A. Luehrman
Home Shopping Network invented the video home shopping industry. It had immediate success in both the product and capital markets, which quickly drew imitators. This case describes the situation as of January 1986, when the company must decide how to sustain successes in both markets. Students must discuss the proper valuation of the firm, proper financing strategy, possible future product lines, and how to deal with competition.
Keywords: Capital Markets;
Financing and Loans;
Supply and Industry;
Product;
Strategy;
Competition;
Valuation;
Telecommunications Industry;
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Supplement
| HBS Case Collection
|
1995
Home Shopping Network, Inc. (Abridged) (SS)
Timothy A. Luehrman
Keywords: Television Entertainment;
Media and Broadcasting Industry;
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Background Note
| HBS Case Collection
|
1995
(Revised from original version)
Corporate Financial Management: A Note on the Course
Timothy A. Luehrman
Keywords: Financial Management;
Curriculum and Courses;
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Teaching Note
| HBS Case Collection
|
1995
(Revised from original 1994 version)
Corporate Financial Management: A Note for Instructors (TN)
Timothy A. Luehrman
Keywords: Financial Management;
Curriculum and Courses;
Citation:
Luehrman, Timothy A. "Corporate Financial Management: A Note for Instructors (TN)." Harvard Business School Teaching Note 295-084, April 1995. (Revised from original December 1994 version.)
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Teaching Note
| HBS Case Collection
|
1995
Note on Financial Programming Over Long Horizons (TN)
Timothy A. Luehrman
Teaching Note for (9-294-087).
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Teaching Note
| HBS Case Collection
|
1995
Kaiser Steel Corporation, 1984 (TN)
Timothy A. Luehrman
Keywords: Steel Industry;
Citation:
Luehrman, Timothy A. "Kaiser Steel Corporation, 1984 (TN)." Harvard Business School Teaching Note 295-142, April 1995.
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Teaching Note
| HBS Case Collection
|
1995
Genzyme Corporation: A Financing History (TN)
Timothy A. Luehrman
Teaching Note for (9-294-005).
Keywords: Biotechnology Industry;
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Teaching Note
| HBS Case Collection
|
1995
MW Petroleum Corporation (A) (TN)
Timothy A. Luehrman
Teaching Note for (9-295-029).
Keywords: Mining Industry;
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Teaching Note
| HBS Case Collection
|
1995
Evolving Finance Function, The: Judy C. Lewent at Merck & Co., Inc. (TN)
Timothy A. Luehrman
Teaching Note for (9-294-014).
Keywords: Pharmaceutical Industry;
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Case
| HBS Case Collection
|
1995
(Revised from original version)
Goodyear Tire & Rubber Co.--1988
Timothy A. Luehrman
Set two years after a takeover attempt forced the company to restructure by leveraging up, selling assets, and repurchasing stock. The case affords an opportunity to analyze what effect the restructuring had on: 1) the cost of capital, 2) investment decisions, and 3) the competitive behavior of other firms in the industry.
Keywords: Acquisition;
Restructuring;
Assets;
Cost of Capital;
Investment;
Competition;
Rubber Industry;
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Background Note
| HBS Case Collection
|
1995
(Revised from original version)
Capital Projects as Real Options: An Introduction
Timothy A. Luehrman
Introduces a framework for evaluating corporate investment projects as call options. Presumes readers are familiar with basic option pricing and basic capital budgeting rules. Explains the motivation for viewing projects as options; presents a mapping between a capital project and an option; shows how to price the option; and explores the managerial implications of this approach to capital budgeting. Concludes with a discussion of common practical, analytical questions that arise with this methodology.
Keywords: Financial Instruments;
Capital Budgeting;
Corporate Finance;
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Teaching Note
| HBS Case Collection
|
1995
Capital Projects As Real Options: An Introduction (TN)
Timothy A. Luehrman
Teaching Note for (9-295-074).
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Teaching Note
| HBS Case Collection
|
1995
Kaiser Steel Corporation, 1972 (TN)
Timothy A. Luehrman
Keywords: Steel Industry;
Citation:
Luehrman, Timothy A. "Kaiser Steel Corporation, 1972 (TN)." Harvard Business School Teaching Note 295-124, March 1995.
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Teaching Note
| HBS Case Collection
|
1995
Corporate Financial Management: Options Exercises (TN)
Timothy A. Luehrman
Teaching Note for (9-293-095).
Keywords: Decisions;
Price;
Stock Options;
Theory;
Investment;
Corporate Finance;
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Teaching Note
| HBS Case Collection
|
1995
Kaiser Steel Corporation, 1950 (TN)
Timothy A. Luehrman
Keywords: Steel Industry;
Citation:
Luehrman, Timothy A. "Kaiser Steel Corporation, 1950 (TN)." Harvard Business School Teaching Note 295-115, February 1995.
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Teaching Note
| HBS Case Collection
|
1995
Lockheed Aeromod Center, Inc. (TN)
Timothy A. Luehrman
Teaching Note for (9-292-123).
Keywords: South Carolina;
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Teaching Note
| HBS Case Collection
|
1995
Note on Adjusted Present Value (TN)
Timothy A. Luehrman
Teaching Note for (9-293-092).
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Exercise
|
1994
(Revised from original 1993 version)
Corporate Financial Management: Options Exercises
Timothy A. Luehrman
This case presents four exercises designed to introduce students to applications of option pricing and decision-tree analysis to real corporate investment problems. Two of the four problems involve decision trees and two involve option pricing. Students should be familiar with basic option pricing theory (Black-Scholes and/or the Binomial Model) before being assigned these exercises.
Keywords: Business Finance;
Financial Management;
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Case
| HBS Case Collection
|
1994
(Revised from original 1994 version)
MW Petroleum Corporation (A)
Timothy A. Luehrman, Peter Tufano and Barbara Wall
Amoco Corp. is negotiating to sell a wholly-owned subsidiary, MW Petroleum, to Apache Corp. MW owns large reserves of oil and gas comprising many properties at different stages of engineering, development, and production. The proposed acquisition is a large one for Apache and poses several important financing and valuation problems. This case focuses primarily on valuation.
Keywords: Acquisition;
Business Subsidiaries;
Mining;
Cash Flow;
Stock Options;
Financing and Loans;
Price;
Negotiation;
Production;
Valuation;
Mining Industry;
Citation:
Luehrman, Timothy A., Peter Tufano, and Barbara Wall. "
MW Petroleum Corporation (A)." Harvard Business School Case 295-029, November 1994. (Revised from original November 1994 version.)
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Teaching Note
| HBS Case Collection
|
1994
The All American Pipeline (TN)
Timothy A. Luehrman
Teaching Note for (9-292-040).
Keywords: Mining Industry;
California;
Texas;
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Background Note
| HBS Case Collection
|
1994
(Revised from original 1993 version)
Note on Adjusted Present Value
Timothy A. Luehrman
Describes the "adjusted present value" (APV) approach to discounted cash flow analysis. Much of the note is devoted to a critical comparison of APV and an approach based on the wrighted average cost of capital (WACC). Argues that APV is usually, if not always, simpler, more accurate, and/or more informative than using the WACC. Designed to be distributed in conjunction with a case on valuation and captial budgeting. Assumes students are familiar with the WACC but not with APV.
Keywords: Valuation;
Cost of Capital;
Citation:
Luehrman, Timothy A. "
Note on Adjusted Present Value." Harvard Business School Background Note 293-092, October 1994. (Revised from original January 1993 version.)
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Teaching Note
| HBS Case Collection
|
1994
Fleetwood Enterprises, Inc.,1990 (TN)
Timothy A. Luehrman
Teaching Note for (9-293-013).
Keywords: Manufacturing Industry;
Iraq;
Kuwait;
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Teaching Note
| HBS Case Collection
|
1994
Texas High-Speed Rail Corporation (TN)
Timothy A. Luehrman
Teaching Note for (9-293-072).
Keywords: Rail Industry;
Texas;
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Teaching Note
| HBS Case Collection
|
1994
Towle Manufacturing Company, 1983 (TN)
Timothy A. Luehrman
Keywords: Manufacturing Industry;
Citation:
Luehrman, Timothy A. "Towle Manufacturing Company, 1983 (TN)." Harvard Business School Teaching Note 295-048, September 1994.
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Case
| HBS Case Collection
|
1994
Evolving Finance Function: Judy C. Lewent at Merck & Co., Inc.
Timothy A. Luehrman
This case examines the career path of Merck's CFO, Judy C. Lewent, as a way of tracing changes over time in Merck's finance function. It describes the adoption of innovative quantitative analytical models, changes in job definitions and in the organization of the financial area, and the evolution of professional relationships between finance and other professionals at Merck. These issues are all examined in the context of changes in the drug business.
Keywords: Finance;
Mathematical Methods;
Personal Development and Career;
Organizational Design;
Innovation and Invention;
Pharmaceutical Industry;
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Background Note
| HBS Case Collection
|
1994
Note on Financial Programming Over Long Horizons
Timothy A. Luehrman
Introduces students to financial programming as a way to incorporate concepts and tools from modern corporate finance theory into a framework for managing over long horizons. Particular attention is paid to corporate capital budgeting and investment processes.
Keywords: Framework;
Theory;
Investment;
Business Processes;
Capital Budgeting;
Corporate Finance;
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Case
| HBS Case Collection
|
1993
Genzyme Corporation: A Financing History
Timothy A. Luehrman and Andrew D. Regan
Genzyme Corp.'s financing history is unusual compared to most biotech companies. This case presents the sequence of financings employed by Genzyme, along with the product--market and corporate-development strategies adopted by Henri Termeer, Genzyme's CEO. As such, the case permits students to evaluate the sequence of financings as a "program" rather than a series of unrelated deals and to consider them in light of the business strategy.
Keywords: History;
Financing and Loans;
Business Strategy;
Growth and Development Strategy;
Biotechnology Industry;
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Case
| HBS Case Collection
|
1993
(Revised from original 1992 version)
BW/IP International, Inc.
Timothy A. Luehrman and Andrew D. Regan
Less than a year after completing a leveraged buyout of their own company, the managers of BW/IP International were presented with an attractive acquisition candidate. To buy the target company, however, BW/IP would have to borrow more money and take on more administrative problems at a time when its managers are already very busy. The case asks students to consider how BW/IP can convince its lenders that the acquisition is a good idea. Presents two straightforward valuation exercises. Also permits a careful comparison of the capital allocation processes at a large, low-leveraged, public company, versus a small, highly-leveraged, private company.
Keywords: Leveraged Buyouts;
Leadership Style;
Valuation;
Resource Allocation;
Capital;
Public Ownership;
Citation:
Luehrman, Timothy A., and Andrew D. Regan. "
BW/IP International, Inc." Harvard Business School Case 293-058, May 1993. (Revised from original November 1992 version.)
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Teaching Note
| HBS Case Collection
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1993
(Revised from original 1992 version)
Note on Operating Exposure to Exchange Rate Changes (TN)
Timothy A. Luehrman
Teaching Note for (9-288-018).
Keywords: Currency Exchange Rate;
Fluctuation;
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Teaching Note
| HBS Case Collection
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1993
Grupo Industrial Alfa, S.A.,1982 (TN)
Timothy A. Luehrman
Teaching Note for (9-292-008).
Keywords: Cash Flow;
Borrowing and Debt;
Restructuring;
Rights;
Business Strategy;
Negotiation;
System;
Business Conglomerates;
Currency Exchange Rate;
Energy Industry;
Telecommunications Industry;
Mexico;
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Teaching Note
| HBS Case Collection
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1993
Jaguar plc,1989 (TN)
Timothy A. Luehrman
Teaching Note for (9-291-034).
Keywords: Auto Industry;
Citation:
Luehrman, Timothy A. "
Jaguar plc,1989 (TN)." Harvard Business School Teaching Note 293-011, April 1993.
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Case
| HBS Case Collection
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1993
(Revised from original 1992 version)
Fleetwood Enterprises, Inc. 1990
Timothy A. Luehrman
The CFO of Fleetwood Enterprises is considering whether to recommend a large share repurchase to the board of directors. Fleetwood's core businesses, manufactured housing and recreational vehicles, are very sensitive to business cycles and oil prices. Following Iraq's invasion of Kuwait, Fleetwood's stock price dropped more than 20%, but Fleetwood appears strong enough to both survive a severe downturn and repurchase a large block of shares. Designed to permit a thorough review of basic capital structure, dividend payout, and share repurchase theories, in the context of a large firm facing both a potential crisis and a valuable opportunity.
Keywords: Business Cycles;
Capital Structure;
Stock Shares;
Price;
Crisis Management;
Production;
Manufacturing Industry;
Iraq;
Kuwait;
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Teaching Note
| HBS Case Collection
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1993
(Revised from original version)
Dainippon Ink and Chemicals, Inc. (TN)
Timothy A. Luehrman
Keywords: Chemical Industry;
Japan;
Citation:
Luehrman, Timothy A. "Dainippon Ink and Chemicals, Inc. (TN)." Harvard Business School Teaching Note 290-050, February 1993. (Revised from original March 1990 version.)
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Teaching Note
| HBS Case Collection
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1993
(Revised from original version)
Fujiya Co. Ltd. (TN)
Timothy A. Luehrman
Keywords: Japan;
Citation:
Luehrman, Timothy A. "Fujiya Co. Ltd. (TN)." Harvard Business School Teaching Note 290-049, February 1993. (Revised from original March 1990 version.)
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Teaching Note
| HBS Case Collection
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1993
(Revised from original version)
LSI Logic Corp. (TN)
Timothy A. Luehrman
Citation:
Luehrman, Timothy A. "LSI Logic Corp. (TN)." Harvard Business School Teaching Note 290-048, February 1993. (Revised from original February 1990 version.)
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Teaching Note
| HBS Case Collection
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1993
(Revised from original version)
Jaguar plc--1984, Teaching Note
Timothy A. Luehrman
Teaching Note for (9-290-005).
Keywords: Auto Industry;
Citation:
Luehrman, Timothy A. "
Jaguar plc--1984, Teaching Note." Harvard Business School Teaching Note 290-034, January 1993. (Revised from original February 1990 version.)
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Teaching Note
| HBS Case Collection
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1993
(Revised from original 1990 version)
Merck-Banyu (TN)
Timothy A. Luehrman
Teaching Note for (9-287-061).
Keywords: Pharmaceutical Industry;
Citation:
Luehrman, Timothy A. "
Merck-Banyu (TN)." Harvard Business School Teaching Note 290-044, January 1993. (Revised from original February 1990 version.)
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Teaching Note
| HBS Case Collection
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1992
(Revised from original version)
Bank for International Development (TN)
W. Carl Kester and Timothy A. Luehrman
Teaching Note for (9-289-034).
Keywords: International Finance;
Banks and Banking;
Banking Industry;
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Background Note
| HBS Case Collection
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1992
(Revised from original 1987 version)
Note on Operating Exposure to Exchange-Rate Changes
Timothy A. Luehrman
Describes the effects on operating cash flows of a real change in exchange rates. Describes different elements of operating exposure and includes illustrative examples.
Keywords: Currency Exchange Rate;
Fluctuation;
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Case
| HBS Case Collection
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1992
(Revised from original 1992 version)
Lockheed Aeromod Center, Inc.
Timothy A. Luehrman
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;
Decisions;
Borrowing and Debt;
Financial Strategy;
Taxation;
Opportunities;
Expansion;
Valuation;
South Carolina;
Citation:
Luehrman, Timothy A. "
Lockheed Aeromod Center, Inc." Harvard Business School Case 292-123, November 1992. (Revised from original March 1992 version.)
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Case
| HBS Case Collection
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1992
Towle Manufacturing Company 1983
Timothy A. Luehrman
Keywords: Manufacturing Industry;
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Case
| HBS Case Collection
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1992
Arundel Partners: The Sequel Project
Timothy A. Luehrman
A group of investors is considering buying the sequel rights for a portfolio of feature films. They need to determine how much to offer to pay and how to structure a contract with one or more major U.S. film studios. The case contains cash flow estimates for all major films released in the United States during 1989. These data are used to generate estimates of the value of sequel rights prior to the first film's release. Designed to introduce students to real options and techniques for valuing them. It clearly illustrates the power of option pricing techniques for certain types of capital budgeting problems. Also illustrates the practical limitations of such techniques.
Keywords: Copyright;
Rights;
Contracts;
Cash Flow;
Fair Value Accounting;
Financial Instruments;
Valuation;
Debt Securities;
Capital Budgeting;
Entertainment and Recreation Industry;
United States;
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Background Note
| HBS Case Collection
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1992
(Revised from original version)
Note on Bankruptcy in the United States
Timothy A. Luehrman
An introduction to, and summary of the laws, rules, and procedures established in the United States for settling the claims of creditors on a bankrupt company. Covers both Chapter 7 liquidations and Chapter 11 reorganizations.
Keywords: Insolvency and Bankruptcy;
United States;
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Case
| HBS Case Collection
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1991
All American Pipeline
Timothy A. Luehrman
Goodyear is nearing its first major capital commitments for the largest investment project in its history, the All American Pipeline. The pipeline will transport heavy crude oil from California to Texas. It is the centerpiece of a major program by Goodyear to diversify away from its core tire business. Goodyear estimates construction cost at just under $1 billion, while outside observers believe the cost could be twice as high. Students are asked to evaluate the project by analyzing data on the supply and demand for heavy crude oil and the economics of transporting it, and by computing and discounting the cash flows the pipeline can be expected to generate.
Keywords: Capital;
Financial Strategy;
Business Startups;
Diversification;
Valuation;
Standards;
Supply Chain;
Resource Allocation;
Cash Flow;
Mining Industry;
California;
Texas;
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Case
| HBS Case Collection
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1991
Kaiser Steel Corporation, 1984
Timothy A. Luehrman
In 1984, Kaiser's shareholders were asked to approve a complicated leveraged buyout of the company. Students are asked to analyze the proposed transaction and make a recommendation. To do this, they must determine who gets what in the deal, whether and how any value is created, whether the post-buyout firm is solvent and adequately capitalized, and how much the newly issued preferred stock is worth. Examines the bankruptcy of the company and the allegations of fraud that followed the 1984 LBO. May be used with Kaiser Steel Corp.--1987.
Keywords: Leveraged Buyouts;
Capital;
Value Creation;
Insolvency and Bankruptcy;
Steel Industry;
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Case
| HBS Case Collection
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1991
(Revised from original version)
Bank for International Development, Software Case
W. Carl Kester and Timothy A. Luehrman
A hypothetical case in which an assistant treasurer of a supranational bank is asked to determine in which currencies it has been cheaper ex post to borrow. An integral part of the case is a Lotus 1-2-3 worksheet containing monthly data on yen and dollar interest rates, exchange rates, and inflation rates from January 1976 to October 1985. The worksheet with accompanying questions prompts students to study the various parity relationships between the yen and the dollar numerically, graphically, or statistically. Students are challenged to draw inferences concerning the circumstances under which a treasurer should expect to prefer borrowing in one currency rather than others. Requires Case Software diskette (9-289-534).
Keywords: Decisions;
Interest Rates;
International Finance;
Relationships;
Currency;
Management Analysis, Tools, and Techniques;
Data and Data Sets;
Inflation and Deflation;
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Supplement
| HBS Case Collection
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1991
(Revised from original version)
Bank for International Development, Master Diskette
Timothy A. Luehrman and W. Carl Kester
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Case
| HBS Case Collection
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1990
(Revised from original 1990 version)
Kaiser Steel Corporation, 1972
Timothy A. Luehrman and William Schiano
Addresses corporate restructuring. Asks students to consider how Kaiser should respond to strong competition from imported steel. Focuses particularly on labor relations in the U.S. steel industry and the feedback from contract negotiations and wage settlements into crucial modernization/investment decisions. May be used with Kaiser Steel Corp.--1950 and Kaiser Steel Corp.--1984.
Keywords: Restructuring;
Decisions;
Investment;
Contracts;
Negotiation;
Labor and Management Relations;
Competition;
Steel Industry;
United States;
Citation:
Luehrman, Timothy A., and William Schiano. "
Kaiser Steel Corporation, 1972." Harvard Business School Case 291-012, December 1990. (Revised from original September 1990 version.)
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Case
| HBS Case Collection
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1990
TRW--1985 (Abridged)
Timothy A. Luehrman
Citation:
Luehrman, Timothy A. "
TRW--1985 (Abridged)." Harvard Business School Case 291-018, November 1990.
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Case
| HBS Case Collection
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1990
(Revised from original 1990 version)
Kaiser Steel Corporation, 1950
Timothy A. Luehrman and William Schiano
Examines Kaiser Steel's initial equity offering in 1950. The first case in a sequence that will trace the history of corporate restructurings that occurred 30 to 40 years later, in the 1980s. Subsequent cases examine foreign competition and labor unrest, hostile takeover attempts and LBOs, and bankruptcy and reorganization. Students are asked to recommend a recapitalization for Kaiser Steel in the context of steel industry competitive dynamics, Kaiser's ownership structure, and the U.S. capital markets in 1950.
Keywords: History;
Competition;
Organizational Structure;
Ownership;
Initial Public Offering;
Restructuring;
Leveraged Buyouts;
Capital Markets;
Insolvency and Bankruptcy;
Acquisition;
Labor and Management Relations;
Steel Industry;
United States;
Citation:
Luehrman, Timothy A., and William Schiano. "
Kaiser Steel Corporation, 1950." Harvard Business School Case 291-005, August 1990. (Revised from original July 1990 version.)
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Case
| HBS Case Collection
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1990
(Revised from original version)
Jaguar plc--1984
Timothy A. Luehrman and William Schiano
A vehicle for analyzing the exposure of operating cash flows to exchange rate changes. Considers the value of Jaguar plc at the time of its privatization and share offering in 1984. Jaguar is a major exporter from the United Kingdom and the United States is therefore exposed to changes in the dollar/sterling exchange rate. Students are asked to estimate the value of the company as a function of expected future exchange rates. Students may also be asked whether and how Jaguar's exposure should be hedged.
Keywords: Change;
Cash Flow;
Currency Exchange Rate;
Risk Management;
Privatization;
Valuation;
Auto Industry;
United Kingdom;
United States;
Citation:
Luehrman, Timothy A., and William Schiano. "
Jaguar plc--1984." Harvard Business School Case 290-005, May 1990. (Revised from original October 1989 version.)
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Case
| HBS Case Collection
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1990
(Revised from original version)
Dainippon Ink and Chemicals, Inc.
Timothy A. Luehrman and Kevin F. Rock
Keywords: Chemical Industry;
Citation:
Luehrman, Timothy A., and Kevin F. Rock. "
Dainippon Ink and Chemicals, Inc." Harvard Business School Case 289-067, May 1990. (Revised from original March 1990 version.)
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Case
| HBS Case Collection
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1990
LSI Logic Corp.
Timothy A. Luehrman
Citation:
Luehrman, Timothy A. "
LSI Logic Corp." Harvard Business School Case 290-035, January 1990.
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Case
| HBS Case Collection
|
1989
(Revised from original 1987 version)
Merck-Banyu
Timothy A. Luehrman
Merck acquired control of Banyu in 1983. This was the first acquisition by outsiders of a major publicly traded Japanese company. This case is focused on valuing strategic investments in an environment of global competition. The case is complex because of the competitive structure of the industry, the international scope of the players, and the necessary involvement in the deal of government regulators from multiple jurisdictions and agencies. Forces students to confront several different valuation methodologies that give conflicting results.
Keywords: Acquisition;
Investment;
Globalization;
Governing Rules, Regulations, and Reforms;
Industry Structures;
Negotiation Deal;
Public Ownership;
Competition;
Valuation;
Japan;
Citation:
Luehrman, Timothy A. "
Merck-Banyu." Harvard Business School Case 287-061, May 1989. (Revised from original January 1987 version.)
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Case
| HBS Case Collection
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1989
(Revised from original version)
Fujiya Co. Ltd.
Timothy A. Luehrman
Citation:
Luehrman, Timothy A. "
Fujiya Co. Ltd." Harvard Business School Case 288-027, April 1989. (Revised from original December 1987 version.)
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Background Note
| HBS Case Collection
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1987
Tax Reform Act of 1986
James F. Gammill Jr. and Timothy A. Luehrman
Keywords: Taxation;
Laws and Statutes;
United States;
Citation:
Gammill, James F., Jr., and Timothy A. Luehrman. "
Tax Reform Act of 1986." Harvard Business School Background Note 287-086, May 1987.