E. Scott Mayfield - Faculty & Research - Harvard Business School

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E. Scott Mayfield

Senior Lecturer of Business Administration

Finance
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Scott Mayfield is a Senior Lecturer of Business Administration in the Finance Unit at the Harvard Business School. Prior rejoining the faculty in 2011, Professor Mayfield was an assistant professor and member of the Finance Unit at HBS from 1997 to 2001. Professor Mayfield currently teaches the second semester finance course in the first year of the MBA program, as well as Finance for Senior Executives and the corporate finance component of the Program for Leadership Development in the Executive Education Program. Previously, Professor Mayfield has taught the advanced corporate finance course in the second year of the MBA program and has been on the faculty of numerous executive education programs, including the Program for Management Development (now GMP), Focused Financial Management, and Creating Value through Corporate Restructuring.

His research focuses on valuation, asset pricing, and the dynamic nature of corporate decision making, including capital budgeting decisions, financing, and payout policies. His articles have been published in a variety of academic journals, including the Journal of Financial Economics, the Journal of Business and Economic Statistics, the Journal of Economics and Business, and the Physical Review A. Professor Mayfield has also written numerous case studies on a range of valuation, financing, and strategic decision making topics. His current research focuses on the valuation and financing of startup ventures.

In addition to his academic research, Professor Mayfield has served as a consultant to numerous corporations and investment advisors. He has also served as an expert witness in litigation matters involving complex valuation and corporate finance issues. Prior to rejoining the HBS Faculty, Professor Mayfield was the Financial Markets Practice Leader and Vice President at Charles River Associates.

Professor Mayfield received his Ph.D. in Economics from the University of Pennsylvania and a bachelor's degree in Economics with Highest Honors from Williams College.

 

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Journal Articles

  2. Article | Energy Journal

    Alternative Models of Uncertain Commodity Prices for Use with Modern Asset Pricing Methods

    Malcolm Baker, E. S. Mayfield and John Parsons

    This paper provides an introduction to alternative models of uncertain commodity prices. A model of commodity price movements is the engine around which any valuation methodology for commodity production projects is built, whether discounted cash flow (DCF) models or the recently developed modern asset pricing (MAP) methods. The accuracy of the valuation is in part dependent on the quality of the engine employed. This paper provides an overview of several basic commodity price models and explains the essential differences among them. We also show how futures prices can be used to discriminate among the models and to estimate better key parameters of the model chosen.

    Keywords: Asset Pricing; Goods and Commodities; Price; Risk and Uncertainty; Valuation; Production; Projects; Cash Flow;

    Citation:

    Baker, Malcolm, E. S. Mayfield, and John Parsons. "Alternative Models of Uncertain Commodity Prices for Use with Modern Asset Pricing Methods." Energy Journal 19, no. 1 (1998): 115–148.  View Details
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Cases and Teaching Materials

  1. Supplement | HBS Case Collection | May 2020

    Valuing Peloton

    E. Scott Mayfield

    Peloton Interactive, a well-known unicorn in the connected fitness space, had gone public with a market capitalization of over $8.0 billion. In the weeks following its public debut, Peloton’s stock price fell by over 25%. Taylor Knox, a stock analyst and enthusiastic Peloton subscriber, must determine the fundamental value of Peloton’s shares, as well as identify and evaluate the key risks associated with its innovative business model.

    Citation:

    Mayfield, E. Scott. "Valuing Peloton." Harvard Business School Spreadsheet Supplement 220-717, May 2020.  View Details
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  2. Case | HBS Case Collection | May 2020

    Valuing Peloton

    E. Scott Mayfield

    Peloton Interactive, a well-known venture-capital-backed unicorn in the connected fitness space, recently had gone public with a market capitalization of over $8.0 billion. However, in the weeks following its public debut, Peloton’s stock price had fallen by over 25%. Taylor Knox, an enthusiastic Peloton subscriber, believed that connected fitness products were the future of exercise and he had been excited about the prospect of investing in Peloton. However, given the market’s reaction to the company’s IPO, Knox understood the need to determine the fundamental value of Peloton’s shares, as well as to identify and to evaluate the key risks associated with its innovative business model. Reflecting on the situation, Knox wondered if this was an opportunity to invest in his favorite activity at a discount. Or, did market investors understand something he didn’t?

    Keywords: Business Model; Public Equity; Initial Public Offering; Disruptive Innovation; Business Strategy; Valuation; Entertainment and Recreation Industry; United States;

    Citation:

    Mayfield, E. Scott. "Valuing Peloton." Harvard Business School Case 220-060, May 2020.  View Details
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  5. Case | HBS Case Collection | October 2018

    The Proxy Fight at ADP

    Robin Greenwood and E. Scott Mayfield

    In July 2017, shares of Automatic Data Processing, Inc. (ADP) surged 12% following a report that the activist investor Bill Ackman had acquired a sizable stake in the company and planned to nominate his own slate of directors at the company’s annual meeting in November. Over the months that followed, Ackman and ADP engaged in an increasingly acrimonious battle of words about the future of ADP. Ackman argued that the company was materially underperforming its potential and could substantially improve its operating margins. ADP vigorously rebutted Ackman’s assertions, arguing that none of his ideas were new and that ADP shares had outperformed the market. As the November deadline loomed, ADP shareholders needed to decide whether to vote for Ackman’s slate of directors or the company’s slate. In making this choice, shareholders needed to consider a single, critical question: Is ADP achieving its maximum potential?

    Citation:

    Greenwood, Robin, and E. Scott Mayfield. "The Proxy Fight at ADP." Harvard Business School Case 219-052, October 2018.  View Details
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  6. Case | HBS Case Collection | July 2018 (Revised August 2018)

    Project Helios: Harvesting the Sun

    Mark Egan and E. Scott Mayfield

    Aware of the impact that modern society was having on the environment, Ashley Telkes had always tried to be cognizant of her own impact on the environment and to take reasonable steps to mitigate her own effects. Having already implemented a number of passive measures to minimize her “carbon footprint,” Telkes must now confront the bigger decision of whether or not to invest in solar panels to generate electricity for her home. Although pre-disposed to pursue environmentally friendly alternatives, the project entailed significant up-front expenses and Telkes could not afford to make a poor financial decision. Telkes must assess the financial merits of the project, as well as understand the regulatory and technological risks associated with going forward or choosing to delay.

    Keywords: Renewable Energy; Personal Finance; Decision Making; Environmental Sustainability;

    Citation:

    Egan, Mark, and E. Scott Mayfield. "Project Helios: Harvesting the Sun." Harvard Business School Case 219-009, July 2018. (Revised August 2018.)  View Details
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  7. Case | HBS Case Collection | April 2018 (Revised March 2019)

    Tesla-SolarCity

    E. Scott Mayfield and Emil N. Siriwardane

    On June 21, 2016, Tesla Motors, Inc. announced its offer to acquire SolarCity, bringing CEO Elon Musk one step closer to completing his goal of moving the world from a hydrocarbon-based economy to a solar-electric one. Markets and analysts were mixed in their reaction to the announcement; some thought the deal would be a distraction to Tesla management at a critical time; others thought it was a “bailout” of SolarCity. Following weeks of due diligence, Tesla and SolarCity finalized their merger agreement and worked to justify the transaction. Joan Banister, a financial advisor, must prepare to address her clients’ concerns about their various financial positions in Tesla and SolarCity.

    Keywords: Tesla; SolarCity; solar power; Mergers and Acquisitions; Renewable Energy; Goals and Objectives; Finance;

    Citation:

    Mayfield, E. Scott, and Emil N. Siriwardane. "Tesla-SolarCity." Harvard Business School Case 218-108, April 2018. (Revised March 2019.)  View Details
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  8. Case | HBS Case Collection | October 2017

    The Transformation of Microsoft

    C. Fritz Foley, E. Scott Mayfield and F. Katelynn Boland

    In early 2015, Amy Hood, CFO of Microsoft, and the rest of the senior leadership team faced a set of fundamental choices. The firm had opportunities to serve customers in ways that would be associated with higher growth but lower margin. Some of these opportunities involved a shift from perpetual licensing to subscription sales. Whatever choices are made must be articulated to investors and employees.

    Keywords: transformation; Growth; Corporate Finance; Valuation; Growth Management; Communication Strategy; Transformation; Information Technology Industry; Computer Industry; United States;

    Citation:

    Foley, C. Fritz, E. Scott Mayfield, and F. Katelynn Boland. "The Transformation of Microsoft." Harvard Business School Case 218-048, October 2017.  View Details
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  9. Case | HBS Case Collection | May 2016 (Revised May 2017)

    Supply Chain Finance at Procter & Gamble

    Benjamin C. Esty, E. Scott Mayfield and David Lane

    In April 2013, Procter & Gamble (P&G), the world’s largest consumer packaged goods (CPG) company, announced that it would extend its payment terms to suppliers by 30 days. At the same time, P&G announced a new supply chain financing (SCF) program giving suppliers the ability to receive discounted payments for their P&G receivables. Fibria Celulose, a Brazilian supplier of kraft pulp, joined the program in 2013, but was re-evaluating the costs and benefits of participating in the SCF program in the summer of 2015. The firm’s treasury group and its US country manager must decide whether to keep using the program and, if so, whether to keep their existing SCF banking relationship or start a new relationship with another global SCF bank.

    Keywords: working capital; supply chain finance; corporate treasury; consumer packaged goods; Cash flow; value creation; supply chain; supplier relationships; banking; liquidity; accounts payable; accrual accounting; Financial Reporting; Cash Flow; Cost Management; Banks and Banking; Financial Strategy; Multinational Firms and Management; Supply Chain Management; Accrual Accounting; Value Creation; Consumer Products Industry; Forest Products Industry; United States; Brazil;

    Citation:

    Esty, Benjamin C., E. Scott Mayfield, and David Lane. "Supply Chain Finance at Procter & Gamble." Harvard Business School Case 216-039, May 2016. (Revised May 2017.)  View Details
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  11. Case | HBS Case Collection | May 2016 (Revised September 2017)

    Canadian Pacific's Bid for Norfolk Southern

    Benjamin C. Esty and E. Scott Mayfield

    In December 2015, Canadian Pacific Railroad (CPR) has just made its third bid to acquire Norfolk Southern Corporation (NSC), one of the largest railroads in the United States. Having rejected the prior offers, NSC’s CEO James Squires and the NSC board must now value the current offer including the projected merger synergies as well as a recently added contingent value right (CVR) designed to “sweeten” the offer and decide how to respond.

    Keywords: Capital Structure; Cash Flow; Cost of Capital; Financial Strategy; Investment Activism; Bids and Bidding; Negotiation Offer; Corporate Strategy; Rail Transportation; Mergers and Acquisitions; Transformation; United States; Canada;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Canadian Pacific's Bid for Norfolk Southern." Harvard Business School Case 216-057, May 2016. (Revised September 2017.)  View Details
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  12. Teaching Note | HBS Case Collection | October 2017

    Canadian Pacific's Bid for Norfolk Southern

    Benjamin C. Esty and E. Scott Mayfield

    Teaching Note for HBS No. 216-057.

    Keywords: Capital Structure; Cash Flow; Cost of Capital; Financial Strategy; Investment Activism; Bids and Bidding; Negotiation Offer; Corporate Strategy; Rail Transportation; Mergers and Acquisitions; Transformation;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Canadian Pacific's Bid for Norfolk Southern." Harvard Business School Teaching Note 218-035, October 2017.  View Details
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  13. Case | HBS Case Collection | May 2015 (Revised September 2017)

    Generating Higher Value at IBM (A)

    Benjamin C. Esty and E. Scott Mayfield

    This case analyzes IBM's financial performance and its capital allocation decisions over a 10-year period from 2004-2013, during which IBM returned more than $140B to shareholders through a combination of dividends and share repurchases. During this time, CEO Sam Palmisano created, announced, and then regularly updated a long-term financial "roadmap" as part of the firm's strategic transformation. The roadmap showed both a destination (a target EPS number) and a detailed path to that destination in terms of revenue growth, margin expansion, and share repurchases. After successfully achieving its first roadmap, the firm announced a second 5-year roadmap known as the "2015 EPS roadmap."
    The case is set in May 2014, just after IBM's annual investor briefing. Despite more than 10 years of strong financial performance, IBM reported relatively weak financial results in the first quarter of 2014. Sophia Johnson, an equity analyst, must decide whether to revise her investment recommendation based on what she heard that day.

    Keywords: dividends; Share Repurchases; Earnings Guidance; financial statement analysis; Financial ratios; Payout policy; Earnings per Share (EPS); Earnings Management; Change Management; Leadership; Transformation; Financial Strategy;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Generating Higher Value at IBM (A)." Harvard Business School Case 215-058, May 2015. (Revised September 2017.)  View Details
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  14. Supplement | HBS Case Collection | May 2015 (Revised December 2016)

    Generating Higher Value at IBM (B)

    Benjamin C. Esty and E. Scott Mayfield

    Keywords: dividends; Share Repurchases; Earnings Guidance; financial statement analysis; Financial ratios; Payout policy; Earnings per Share (EPS); Value Creation; Financial Statements; Corporate Finance; Computer Industry;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Generating Higher Value at IBM (B)." Harvard Business School Supplement 215-059, May 2015. (Revised December 2016.)  View Details
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  15. Teaching Note | HBS Case Collection | November 2017

    Generating Higher Value at IBM (A) and (B)

    Benjamin C. Esty and E. Scott Mayfield

    Teaching Note for HBS Nos. 215-058 and 215-059.

    Keywords: dividends; Share Repurchases; Earnings Guidance; financial statement analysis; Financial ratios; Payout policy; Earnings per Share (EPS); Earnings Management; Change Management; Leadership; Transformation; Financial Strategy;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Generating Higher Value at IBM (A) and (B)." Harvard Business School Teaching Note 218-037, November 2017.  View Details
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  16. Case | HBS Case Collection | June 2014 (Revised October 2015)

    Molycorp: Financing the Production of Rare Earth Minerals (A)

    Benjamin C. Esty and E. Scott Mayfield

    Molycorp, the western hemisphere's only producer of rare earth minerals, was in the middle of a $1 billion capital expenditure project in its effort to become a vertically integrated supplier of rare earth minerals, oxides, and metals. Yet it had just reported lower than expected revenues and earnings for the second quarter of 2012. In response to the announcement, its stock price fell 29% (its stock price had fallen from $77 to $11 in the past 18 months). The weakening financial performance was due in large part to falling prices for rare earth minerals. With less internally-generated cash flow available to fund the project, management had to decide: how much capital to raise, what kind to raise, and when to raise it. These decisions would determine its capital structure, at least in the short term, as well as its ability to implement its business strategy.

    Keywords: financial strategy; convertible debt; uncertainty; competition; Startup; China; Supply ＆ demand; Growth; rare earth minerals; capital structure; valuation; discounted cash flows; Vertical Integration; mining; payoff diagrams; option pricing; Capital Budgeting; Capital Structure; Cash Flow; Financial Strategy; Market Entry and Exit; Vertical Integration; Valuation; Metals and Minerals; Mining Industry; Industrial Products Industry; Canada; California;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Molycorp: Financing the Production of Rare Earth Minerals (A)." Harvard Business School Case 214-054, June 2014. (Revised October 2015.)  View Details
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  17. Case | HBS Case Collection | August 2014 (Revised March 2015)

    Molycorp: Issuing the 'Happy Meal' Securities (B)

    Benjamin C. Esty and E. Scott Mayfield

    Molycorp, the Western hemisphere's only producer of rare earth minerals, was in the middle of a $1 billion capital expansion in its effort to become a vertically integrated supplier of rare earth minerals, oxides, and metals. After reporting lower than expected revenues and earnings for the second quarter of 2012, management needed to design a new funding strategy for the firm. In August 2012, Molycorp announced it would issue $120 million of equity and $360 million of convertible debt. To facilitate the issuance of convertible debt, the firm entered a "share lending agreement" with Morgan Stanley whereby Morgan Stanley would borrow shares from Molycorp in a transaction referred to as a "Happy Meal." The goal was to help convertible debt investors "hedge their respective investments through short sales." The challenge of the case is to understand why Molycorp used this financing strategy and what impact it would likely have on the firm, its prospects, and its stock price.

    Keywords: financial strategy; convertible debt; uncertainty; Startup; Growth; rare earth minerals; capital structure; valuation; mining; hedge funds; short selling; Equity Capital; Capital Structure; Financial Strategy; Valuation; Metals and Minerals; Equity; Capital; Debt Securities; Stock Shares; Financial Management; Mining Industry; Industrial Products Industry; Canada; California;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Molycorp: Issuing the 'Happy Meal' Securities (B)." Harvard Business School Case 215-014, August 2014. (Revised March 2015.)  View Details
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  18. Case | HBS Case Collection | August 2014 (Revised March 2015)

    Molycorp: Morgan Brothers' Reverse Convertible Notes (C)

    Benjamin C. Esty and E. Scott Mayfield

    In August 2011, Morgan Brothers Bank was issuing a $2.5 million reverse convertible note with payoffs linked to the price of Molycorp's common stock. These financially engineered securities were just one of many kinds of structured notes available in the retail market. Investors must decide whether the notes were fairly priced and whether they offered a favorable risk-return trade-off.

    Keywords: structured products; reverse convertible notes; replication; option pricing; bond pricing; debt securities; financial engineering; Valuation; Metals and Minerals; Debt Securities; Finance; Investment; Mining Industry; Financial Services Industry; Canada; California;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Molycorp: Morgan Brothers' Reverse Convertible Notes (C)." Harvard Business School Case 215-002, August 2014. (Revised March 2015.)  View Details
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  19. Teaching Note | HBS Case Collection | October 2015

    Molycorp: Financing the Production of Rare Earth Minerals (A)

    Benjamin C. Esty and E. Scott Mayfield

    Molycorp, the western hemisphere's only producer of rare earth minerals, was in the middle of a $1 billion capital expenditure project in its effort to become a vertically integrated supplier of rare earth minerals, oxides, and metals. Yet it had just reported lower than expected revenues and earnings for the second quarter of 2012. In response to the announcement, its stock price fell 29% (its stock price had fallen from $77 to $11 in the past 18 months). The weakening financial performance was due in large part to falling prices for rare earth minerals. With less internally-generated cash flow available to fund the project, management had to decide: how much capital to raise, what kind to raise, and when to raise it. These decisions would determine its capital structure, at least in the short term, as well as its ability to implement its business strategy.

    Keywords: financial strategy; convertible debt; uncertainty; competition; Startup; China; Supply ＆ demand; Growth; rare earth minerals; capital structure; valuation; discounted cash flows; Vertical Integration; mining; payoff diagrams; option pricing; Capital Budgeting; Capital Structure; Cash Flow; Financial Strategy; Market Entry and Exit; Vertical Integration; Valuation; Metals and Minerals; Mining Industry; Industrial Products Industry; Canada; California;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Molycorp: Financing the Production of Rare Earth Minerals (A)." Harvard Business School Teaching Note 216-020, October 2015.  View Details
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  20. Case | HBS Case Collection | October 2012 (Revised September 2013)

    Creating the First Public Law Firm: The IPO of Slater & Gordon Limited

    Benjamin C. Esty and E. Scott Mayfield

    Slater & Gordon (S&G), a midsized Australian law firm with a high-growth consolidation strategy, had an initial public offering (IPO) scheduled for May 2007. Due to a series of regulatory changes in Australia in recent years, the IPO provided an opportunity for S&G to become the first publicly-traded law firm in the world. The firm and its underwriters had just issued a prospectus and were now in the process of lining up investors for the offering. Gloria Rosen, a portfolio manager at Freemantle Securities, was trying to decide whether to buy the stock for her small-cap growth fund. With only a few days left to place an order for the offering, she had to decide whether to invest and, if so, how much to invest. To make her investment decision, Rosen had to understand the value implications of the firm's business model and its growth strategy, as well as the relevant risks.

    Keywords: IPO; Mergers ＆ Acquisitions; law firm; valuation; value drivers; growth strategy; revenue recognition; corporate governance; roll-up; consolidator; Initial Public Offering; Valuation; Consolidation; Mergers and Acquisitions; Financial Strategy; Growth Management; Corporate Governance; Business Strategy; Legal Services Industry; Financial Services Industry; Australia;

    Citation:

    Esty, Benjamin C., and E. Scott Mayfield. "Creating the First Public Law Firm: The IPO of Slater & Gordon Limited." Harvard Business School Case 213-019, October 2012. (Revised September 2013.)  View Details
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  22. Case | HBS Case Collection | November 2011 (Revised September 2012)

    Underwater Engineer at Intel Corporation

    E. Scott Mayfield

    Molly Miller, an Intel employee and shareholder, must decide whether to vote FOR or AGAINST Intel's proposed 2009 option exchange program. Given recent declines in Intel's stock price, more than 99% of Intel's outstanding employee stock options are "underwater," and employee motivation and retention are serious concerns. If the program is approved by shareholders, Molly must decide whether to participate in the program and tender her underwater employee stock options. As a shareholder and an employee, Molly must assess the pros and cons of Intel's proposed exchange program from both perspectives. In addition, she must consider Intel's proposal in light of the alternative approaches pursued by other corporations that have recently confronted the problem of underwater employee stock options.

    Keywords: Stock Options; Employee Stock Ownership Plan; Semiconductor Industry;

    Citation:

    Mayfield, E. Scott. "Underwater Engineer at Intel Corporation." Harvard Business School Case 212-047, November 2011. (Revised September 2012.)  View Details
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  23. Case | HBS Case Collection | November 2011 (Revised November 2012)

    L'Occitane en Provence

    Bo Becker, Daniela Beyersdorfer, Scott Mayfield and Mayuka Yamazaki

    Cosmetics company L'Occitane en Provence must decide if it is the right time to go public, and, if so, where to list. The firm could list on Euronext in Paris, close to the firm's headquarters in southern France, on one of the large exchanges in the U.S., or perhaps in Asia, where much of the firm's future growth is expected. The case provides opportunities to discuss the benefits and costs of going public, including valuation implications, and illustrates the choices faced by a prospective IPO firm that operates in a global setting.

    Keywords: Initial Public Offering; France;

    Citation:

    Becker, Bo, Daniela Beyersdorfer, Scott Mayfield, and Mayuka Yamazaki. "L'Occitane en Provence." Harvard Business School Case 212-051, November 2011. (Revised November 2012.)  View Details
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  25. Teaching Note | HBS Case Collection | November 2001

    Provident Life and Accident Insurance: The Acquisition of Paul Revere TN

    Mihir A. Desai, E. Scott Mayfield and Mark Veblen

    Teaching Note for (9-202-044).

    Keywords: Insurance Industry; Service Industry;

    Citation:

    Desai, Mihir A., E. Scott Mayfield, and Mark Veblen. "Provident Life and Accident Insurance: The Acquisition of Paul Revere TN." Harvard Business School Teaching Note 202-046, November 2001.  View Details
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  26. Case | HBS Case Collection | September 2000 (Revised January 2016)

    Netflix (2000)

    E. Scott Mayfield

    The CEO of a successful Internet start-up must decide whether to delay the company's initial public offering following a significant decline in the NASDAQ market during the spring of 2000. The company's CFO is asked to reevaluate the company's projected cash flow needs in light of the new requirement that in order to go public, Internet companies must show positive cash flows within a 12-month horizon. While examining ways to extend the company's working capital, the CFO considers various changes to the company's existing business model, including changes in the company's contractual relationships with both its suppliers and its customers.

    Keywords: Business Model; Contracts; Initial Public Offering; Cash Flow; Service Delivery; Financial Strategy; Web Services Industry;

    Citation:

    Mayfield, E. Scott. "Netflix (2000)." Harvard Business School Case 201-037, September 2000. (Revised January 2016.)  View Details
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