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  • April 1999
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  • HBS Case Collection

General Property Trust

By: Peter Tufano
  • Format:Print
  • | Pages:11
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Abstract

In 1994 General Property Trust, an Australian property investment trust, was anticipating future cash needs beyond those that the Trust could fund with internal cash flows. The managers of the Trust were considering a novel financing structure whereby it would sell call options on the Trust's units. The options' structure made it likely that they would be exercised, and therefore investors would choose to buy the Trust's units. The managers had to determine the appropriateness of this funding scheme in light of the Trust's alternatives and evaluate the proposed pricing of the options that would be offered via a rights offering.

Keywords

Financing and Loans; Financial Institutions; Financial Services Industry; Real Estate Industry; Australia

Citation

Tufano, Peter, and John C Handley. "General Property Trust." Harvard Business School Case 299-098, April 1999.

About The Author

Peter Tufano

Finance
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