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  • March 2011 (Revised November 2011)
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Harmonic Hearing Co.

By: Howard H. Stevenson and Craig H. Stephenson
  • Format:Print
  • | Language:English
  • | Pages:11
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Abstract

Harmonic is a small, privately held manufacturer of hearing aids. Harriet Burns and Marc Davis, two employees at Harmonic, have an opportunity to purchase the company from the founder. As well-informed insiders who understand the industry, Burns and Davis believe the benefits of ownership far outweigh the risks. While the decision to purchase Harmonic is easy for them, arranging financing proves more difficult. The company is preparing to launch a new hearing aid product and Burns and Davis want the financing package to include the additional capital required to complete both the development and the launch. Two financing alternatives are presented: one is virtually all debt-financed, the other all equity. The financing structure Burns and Davis select will have a significant impact on the products and future prospects of the company. Students must analyze the two financing alternatives, determine the advantages and disadvantages, and recommend the best option.

Keywords

Debts; Quantitative Analysis; Financing; Entrepreneurial Finance; Development Stage Enterprises; Small & Medium-sized Enterprises; Small Business; Business Growth and Maturation; Cash Flow; Mathematical Methods; Entrepreneurship; Financing and Loans; Borrowing and Debt; Equity; Manufacturing Industry

Citation

Stevenson, Howard H., and Craig H. Stephenson. "Harmonic Hearing Co." Harvard Business School Brief Case 114-271, March 2011. (Revised November 2011.)
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About The Author

Howard H. Stevenson

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Related Work

    • March 2011 (Revised November 2011)
    • Faculty Research

    Harmonic Hearing Co. (Brief Case)

    By: Howard H. Stevenson and Craig Stephenson
    • March 2011 (Revised November 2011)
    • Faculty Research

    Harmonic Hearing Co., Faculty Spreadsheet (Brief Case)

    By: Howard H. Stevenson and Craig Stephenson
    • March 2011 (Revised November 2011)
    • Faculty Research

    Harmonic Hearing Co., Spreadsheet Supplement (Brief Case)

    By: Howard H. Stevenson and Craig Stephenson
    • March 2011 (Revised November 2011)
    • Faculty Research

    Harmonic Hearing Co.

    By: Howard H. Stevenson and Craig H. Stephenson
Related Work
  • Harmonic Hearing Co. (Brief Case) By: Howard H. Stevenson and Craig Stephenson
  • Harmonic Hearing Co., Faculty Spreadsheet (Brief Case) By: Howard H. Stevenson and Craig Stephenson
  • Harmonic Hearing Co., Spreadsheet Supplement (Brief Case) By: Howard H. Stevenson and Craig Stephenson
  • Harmonic Hearing Co. By: Howard H. Stevenson and Craig H. Stephenson
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