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Corporate Finance Finance II (441) Professor Matsa |
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Case Assignments
There are five case assignments, which should be prepared for the
classes indicated on the syllabus. I
encourage you to discuss and solve all of the cases in groups. Each of the cases is in your course packet. Each case has a graded component: either a
written case memo, or a short web-based assignment. Written case memos for UST Inc. and General
Motors should be submitted at the beginning of the appropriate class. You should retain a copy of your write-up, so that you can refer to it during the case
discussion. Short web-based assignments
for Arundel Partners, FPL, and Safeway should be completed online by 8 AM on
the day we discuss each case.
This page contains discussion questions, additional files, and
references which you may find useful in preparing the cases. A number of the
exhibits from the cases have been converted into Excel spreadsheets for your
use.
Arundel Partners: The Sequel
Project
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Case questions
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Additional case links:
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Current
movies. (Some may consider reviewing current movies as necessary research
for completing this case.)
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The
Internet Movie Database. A searchable database of movie information.
Dividend Policy at FPL Group, Inc.
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Case questions
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Additional case links:
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FPL
Group website
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Florida
Power & Light Company website
UST Inc.
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Case questions
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Case
Exhibits 1, 2, and 4. I have changed
the equity beta for UST from 1.1 to 0.8 in this spreadsheet. This way it is
consistent with Exhibit 4 as well as the text of the case. If you are unsure of
how some of the numbers in Exhibit 4 are calculated, you can look at the
formulas in the spreadsheet.
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Additional case links:
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UST
Inc. website
Liability Management at General
Motors
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Case
discussion questions. If you do not
remember how to interpret semi-log regressions, like equation 1 in the case
questions, you should review your notes from statistics (DECS 434). Look at the “Primer on Logarithms in
Regression Analysis" in week 7 of the notes.
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Case exhibits
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Excel
format. Exhibits 2, 3, 5, and 7
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Stata format.
This is the data from Exhibit 3 in Stata
format. If you have used Stata before, this may be an easier way to run the
regressions for question 2.
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Additional case links:
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General Motors website
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Swap and bond pricing. Swaps are
essentially an exchange of bonds. If you buy a five-year fixed rate bond and
(short) sell a five-year floating rate bond (based on LIBOR), then you have
committed to receive the fixed rate and pay the floating rate for the next five
years. This is a fixed for floating rate swap. If you would like a review of
these concepts see the bond
pricing supplementary exercise from lecture 2.
Safeway, Inc.’s Leveraged Buyout
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Case questions
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Additional case links:
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Safeway
website
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Finance Department | Kellogg School of Management | Northwestern University |