Case Problems in Finance

W. E. Fruhan  Jr.; W. C. Kester; S. P. Mason; T. R. Piper; R. S. Ruback

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Book | 1992

Case Problems in Finance

by W. E. Fruhan Jr., W. C. Kester, S. P. Mason, T. R. Piper and R. S. Ruback

Keywords: Finance;

Format: Print

Find at Harvard

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.

About the Authors

William E. Fruhan

George E. Bates Professor, Emeritus

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W. Carl Kester

George Fisher Baker Jr. Professor of Business Administration

Finance

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Thomas R. Piper

Lawrence E. Fouraker Professor of Business Administration, Emeritus

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View Publications »

Richard S. Ruback

Baker Foundation Professor, Willard Prescott Smith Professor of Corporate Finance, Emeritus

Finance

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More from these Authors

Case | HBS Case Collection | August 2019

Systems Design West

Richard Ruback and Royce Yudkoff

Jenn Braus (HBS 2013) was half-way through the 90-day exclusivity period for her proposed acquisition of Systems Design West (“SDW”). She had completed her business and accounting due diligence. Just as she was about to ask her lawyer to begin drafting the purchase agreement, she received a call from the seller that the company had reached agreement with a large new client that would increase revenue by roughly 20%. The seller asked that the success be reflected in an increased offer price, although he had not specified the amount of the increase.
Braus needed to decide on an appropriate response. Should she stand fast? In her mind, she had already agreed to pay a premium price for SDW, with a higher than typical multiple of EBITDA. Part of her rationale for the high multiple was that she believed the company had significant growth potential. Paying a higher price in response to the new customer seemed like paying twice for the growth. However, because the new customer was so large, Braus imagined that it would nudge the run rate EBITDA for SDW to about $1 million, eliminating a concern she had about the small size of the business. If she decided to negotiate a higher price, how much an increase was appropriate? Simply applying historical margins would imply that a 20% increase in revenue would correspond to a 20% increase in price. Alternatively, it could be more as margins improved with operating leverage or it could be less if significant fixed costs were required to on-board the new customer. Additionally, Braus was concerned that a new customer was inherently riskier than SDW’s typical customer that had a history of recurring revenue.

Keywords: Acquisition; Price; Negotiation Offer; Decision Making;

Citation:
Ruback, Richard, and Royce Yudkoff. "Systems Design West." Harvard Business School Case 220-004, August 2019. View Details

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Supplement | HBS Case Collection | March 2019

Baskits

Richard S. Ruback and Royce Yudkoff

Citation:
Ruback, Richard S., and Royce Yudkoff. "Baskits." Harvard Business School Multimedia/Video Supplement 219-709, March 2019. View Details

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Casebook | 2019

Private Equity: A Casebook

Paul A. Gompers, Victoria Ivashina and Richard S. Ruback

This book is a collection of cases and notes that have been used in Private Equity Finance, an advanced corporate finance course offered in the second year of the Harvard Business School’s MBA curriculum, over several years. Our goal is to provide detailed insight into the sources of value creation as well as outline the process of deal making in the private equity industry.

Keywords: Private Equity; Value Creation; Cases;

Citation:
Gompers, Paul A., Victoria Ivashina, and Richard S. Ruback. Private Equity: A Casebook. London: Anthem Press, 2019. View Details

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Case Problems in Finance

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