NEW FINANCE CASES - Ivey Publishing€¦ · · 2017-05-25New Finance Cases 9B17N009 Medibank ......

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New Finance Cases

9B17N009

Medibank Private Limited: The Initial Public OfferingColette Southam; Barry Newell;Brianne Gardner;

In November 2014, an intern at Top Dog Wealth Management in Brisbane, Australia, was assisting with a market evaluation and company evaluation for Medibank Private Limited (Medibank). The upcoming Medibank initial public offering (IPO) was set to be one of Australia’s largest and was expected to generate more than AU$4 billion from shareholders who were keen to own a piece of the country’s largest private health insurer. Because the intern was new to the deal, her supervisor gave her access to his notes and directed her to use Bloomberg terminals. As she read through this material, the intern pondered some important questions: What was Medibank worth? Which valuation methods should she use?

Publication Date: April 20, 2017Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 13Teaching Note(s): 8B17N009;Issues: initial public offering (IPO), valuation, healthcare, stock market, insuranceIndustry: Health Care Services;Setting: Australia, Large organization, 2014Difficulty: Undergraduate/MBALearning Objective: This case can be used in undergraduate or postgraduate finance courses with units on corporate finance, capital raising, and/or valuation. Medibank’s IPO provides opportunities for students to undertake the following activities:Perform a discounted cash flow valuation of an established and market‐leading firm with relatively stable gross margins and healthy revenue growth.Practice relative valuation techniques using capitalized earnings, capitalized earnings before interest and taxation, and book value.Explore the benefits and costs associated with IPOs in the context of an offer without an underwriter.

9B17N007

Neptune Orient Lines: Valuation and Capital StructureRuth S.K. Tan; Zsuzsa R. Huszar; Weina Zhang;

Neptune Orient Lines Limited (NOL) was started as Singapore’s national shipping line to facilitate industrial development and support the economy. The CMA CGM Group (CMA CGM) had acquired 67 per cent of NOL from Temasek Holdings Private Limited for SG$2.3 billion or $1.30 per share—a 6 per cent premium over the last closing price. In 2016, CMA CGM sought to acquire the remaining shares at the same price so that it could delist NOL and take it private. In order to delist, the company would need to acquire another 23 per cent of shares to hit the acceptance threshold of 90 per cent. Should the remaining shareholders sell their shares at $1.30 per share, or hold out for a better price? Should bondholders of CMA CGA and NOL be concerned about the acquisition?

Publication Date: March 29, 2017Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 14Teaching Note(s): 8B17N007;Issues: credit risk, dividend discount model, relative valuation, discounted cash flowIndustry: Finance and Insurance;Setting: Large organization, 2015Difficulty: Undergraduate/MBALearning Objective: This comprehensive valuation case can be used in an advanced undergraduate or MBA course on corporate finance or financial management. The case presents an opportunity for students toconduct a valuation exercise of a large shipping company in the context of an acquisition, andexamine the impact of the acquisition on the bonds of both the acquirer and the target.

9B17N008

Shenzhen JIT Technology: Accounts Receivable Management IssuesDazhi Chu; Li Wang;

In March 2012, the president of Shenzhen JIT Technology Co., Ltd., a small electronics manufacturing company in Shenzhen, China, was facing a problem with the company’s uncollected accounts receivables (AR). The company had a high level of AR, and the time it was taking to settle these accounts was much longer than the industry average, which had led to financial difficulties. The company had formalized its sales commission structure to include a system of rewards and penalties related to the collection of outstanding AR payments, but these new rules had not solved the AR problem. The president needed answers: What was the main reason for the company’s high AR and receivable turnover? What was wrong with its AR policy? What specific approach for quantity management of AR would resolve these issues?

Publication Date: March 29, 2017Discipline: Finance; International;Product Type/Pricing: Case (Field), Standard CasePages: 8Teaching Note(s): 8B17N008;Issues: accounts receivable, commercial credit, accountingIndustry: Information, Media & Telecommunications;Setting: China, Medium organization, 2012Difficulty: Undergraduate/MBALearning Objective: This case is appropriate for undergraduate and graduate courses in credit management and accounts receivable. It is intended to enhance students’ in‐depth understanding and application of the theories of accounts receivable management. After working through the case and assignment questions, students will be able to do the following:Understand the theoretical foundation of accounts receivable management.Grasp the various approaches to accounts receivable management.Understand the various risks of accounts receivable and appropriate response measures.

9B17B004

Tesco: From Troubles to TurnaroundAnupam Mehta; Utkarsh Goyal; Sanchit Taneja;

In 2016, Tesco PLC, a leading U.K. retail chain, had undergone tremendous financial turmoil. Profitability had been decreasing since 2013 with heavy losses registered during fiscal year (FY) 2014/15. Net profit had decreased by 304 per cent from 2012 to 2015. However, after the appointment of a new chief executive officer in 2014, Tesco managed to register a net profit of £138 million in FY 2015/16: an astonishing turnaround. Evidently, Tesco was recovering from its losses, but the share price of the company had fallen by more than 20 per cent from 2015 to 2016. What course of action would enable Tesco to maintain and improve its value for shareholders? What areas should the chief executive officer focus on in order to change Tesco’s financial performance?

Publication Date: March 13, 2017Discipline: Finance; Accounting; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 10Teaching Note(s): 8B17B004;Issues: financial evaluation, financial analysis, strategic focus, grocery, department storesIndustry: Retail Trade;Setting: United Kingdom, Large organization, 2016Difficulty: Undergraduate/MBALearning Objective: Using this case, students will be able to do the following:Understand the retail trends in the U.K. supermarket industryIdentify the challenges faced by TescoUnderstand and apply various financial assessment tools and techniques, and conduct a financial ratio analysisPrepare and review the trend analysis and common size statements to determine the best course of action for Tesco going forward

9B17N006

Food Empire: Valuation and InvestmentRuth S.K. Tan; Zsuzsa R. Huszar; Weina Zhang;

Food Empire Holdings Limited (Food Empire) was a food and beverage brand owner and manufacturer of instant beverage products, frozen convenience food, confectionery, and snacks. Its main markets were Russia and Ukraine. When the political tensions between Russia and Ukraine erupted and their currencies depreciated in 2014, Food Empire’s bottom line was badly affected: its share price dropped 71 per cent in 30 months. In light of these developments, investors were not sure if they should sell their investments in Food Empire. Using financial statement analysis and various valuation concepts—including net tangible assets, dividend discount models, and peer multiples—it was hoped that the best course of action could be determined.

Publication Date: March 09, 2017Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 20Teaching Note(s): 8B17N006;Issues: common size statements, financial ratios, Du Pont identity, industry averages, frozen foodIndustry: Manufacturing;Setting: Singapore, Large organization, 2016Difficulty: Undergraduate/MBALearning Objective: This case can be used in an undergraduate or MBA course in investment analysis. It presents an opportunity for students to evaluate the intrinsic value of a company by interpreting theliquidity ratios,solvency ratios,asset efficiency ratios,profitability ratios, andmarket value ratios.

9B17N005

Federal Bank: Dividend Discount ValuationDebasish Maitra; Varun Dawar;

In mid‐2014, an investor was examining Federal Bank stock and its valuation. In order to fund her children’s educational savings for the future, the investor had been looking for high‐growth but undervalued investment stocks. Based on her current market analysis, she had narrowed her search to Federal Bank Limited. Could Federal Bank be the undervalued stock that the investor was looking for? What would be the fair fundamental value of the bank? The dividend discount valuation model, a technique to identify and value undervalued stocks, would determine whether Federal Bank was a potential investment target.

Publication Date: February 28, 2017Discipline: Finance; International;Product Type/Pricing: Case (Field), Standard CasePages: 10Teaching Note(s): 8B17N005;Issues: dividend discount, valuationIndustry: Finance and Insurance;Setting: India, 2014Difficulty: Undergraduate/MBALearning Objective: The case allows students to identify a potential investment target using the dividend discount

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valuation method. After completion of this case, students will be able toassess the opportunities and risks associated with a potential investment target using a strengths, weakness, opportunities, and threats analysis;understand the key assumptions and mechanics of dividend discount valuation methodology; andperform valuation of a stock using dividend discount valuation methodology.

9B17N004

F. Mayer Imports: Hedging Foreign Currency RiskWallace Fan;

In September 2014, F. Mayer Imports Pty. Ltd., an Australian gourmet food importer, had a narrow window of opportunity to potentially protect its budget exchange rate for the rest of that, and the following, financial year. With imports such as European butter, chocolate, and cheese, the company procured a significant portion of its product in euros. The Australian dollar to euro exchange (AUD/EUR) dropped from a high of 0.7027 in October 2013 to a low of 0.6369 in January 2014. With the AUD/EUR recently rebounding and edging back toward the company’s budget rate of 0.6900, the company’s chief financial officer needed to choose between four proposed hedging strategies.

Publication Date: February 27, 2017Discipline: International; Finance;Product Type/Pricing: Case (Field), Standard CasePages: 8Teaching Note(s): 8B17N004;Issues: options, risk management, forwards, exchange rates, foreign exchangeIndustry: Wholesale Trade;Setting: Australia, Medium organization, Late 2014Difficulty: Undergraduate/MBALearning Objective: This case is suitable for advanced financial risk management courses and MBA courses in financial and corporate management. The case puts students in the chief financial officer’s situation to do the following:appreciate volatility in foreign currencies and how it may impact a company’s profit margin and competitive advantage in the marketplace;understand and evaluate various foreign currency risk‐hedging strategies by using payoff diagrams; and,understand that there are costs to every hedging strategy, even when the strategy is identified as “zero cost.”

9B17N001

Alibaba's Bonds Dilemma: Location, Timing, and PricingEmir Hrnjić;

In 2014, Alibaba—the Chinese e‐commerce giant who, in September 2014, completed the largest initial public offering (IPO) in New York Stock Exchange (NYSE) history—was preparing itself for an additional round of capital fundraising. This time, Alibaba focused its efforts on a new, large bond issue. Its chief executive officer would lead Alibaba’s finance team in meetings with investors in Hong Kong, Singapore, and London to gather information about this pending bond issue. Although Alibaba was listed on the NYSE, an overwhelming majority of its revenues originated in China. Most U.S. investors had not heard of Alibaba until just a few months prior to its IPO in September 2014. Also, being a high‐tech company, Alibaba was subject to the potential for large swings in valuations typical for the industry. Fluid valuations and matters related to country risk premia meant pricing the bond issue was going to be a challenge. How would Alibaba estimate the bonds’ pricing? Further, how should the firm determine the location and timing of the new bond issue?

Publication Date: February 21, 2017Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 19Teaching Note(s): 8B17N001;Issues: bonds, fund raising, Internet, pricingIndustry: Information, Media & Telecommunications;Setting: China, Large organization, 2014Difficulty: Undergraduate/MBALearning Objective: This case is designed for an MBA or advanced undergraduate course in corporate finance, dealing with the topic of raising funds by issuing bonds. After completion of this case, students will be able toassess the complexities related to issuing bonds, especially complexities related to risk, pricing, timing, and location of bonds issue;understand emerging markets (in particular, China) and bond pricing differences (country risk premia) between China and the United States; andevaluate the potential effect of certain governance structures (specifically, dual class ownership structures and VIEs).

9B17N002

WH Group: A Failed IPO in Hong KongEmir Hrnjić;

In July 2014, WH Group faced the issue of attempting to launch an initial public offering for the second time, after having previously failed to list its shares on the Hong Kong Stock Exchange. WH Group originated from a merger between two meat‐processing companies: China’s Shuanghui International—a global leader in animal protein and the world’s largest pork producer—and Smithfield Foods from the United States. Both Shuanghui and Smithfield Foods commanded top market shares of pork consumption in their respective countries; Shuanghui controlled 2 per cent in China and Smithfield Foods captured 26 per cent in the United States. With many challenges ahead, WH Group had some decisions to make about the company’s future. Should the company try again to launch an initial public offering? Or should the company remain private?

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Publication Date: February 21, 2017Discipline: International; Finance;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 16Teaching Note(s): 8B17N002;Issues: initial public offering, produce, meat, animal products, IPO, mergersIndustry: Accommodation & Food Services;Setting: Hong Kong, Large organization, 2014Difficulty: Undergraduate/MBALearning Objective: This case is suitable for graduate or advanced undergraduate programs in corporate finance, as well as courses on the preparation and launch of an initial public offering (IPO), especially in regard to a subsequent launch after an earlier attempt has failed. After completion of the case, students should be able to do the following:Discuss the prospects and issues related to raising funds via a second IPO attempt, after the first IPO attempt has failedEvaluate potential reasons why an IPO attempt might failUnderstand the basics of the IPO process, including the decision, timing, and pricing of an IPOAnalyze various available options after a failed IPO attempt

9B17N003

Next India Traveler: A Valuation ChallengeBhanu Pratap Singh; Vinay Goyal; M. Kannadhasan;

Next India Traveler (NIT) was a travel and tour operator based in Chandigarh, India. The young start‐up had been in business since 2012. It offered both inbound and outbound tour and travel packages that covered all the major tourist destinations in India and the Asia‐Pacific region. NIT’s motto was to provide its clients with best‐in‐class services for all aspects of travel and tourism, all under one roof. An upcoming meeting with a venture capitalist firm was crucial to NIT’s future plans for growth, and the investors would certainly want to have a clear idea of the company’s value. Thus, before making his pitch to the venture capital firm, NIT’s owner wanted to perform a valuation of his start‐up. Unfortunately, the lack of long‐term data and a proven methodology for valuing relatively new companies meant the owner faced a considerable challenge in terms of identifying the most appropriate model for the task.

Publication Date: February 08, 2017Discipline: Finance; Entrepreneurship;Product Type/Pricing: Case (Field), Standard CasePages: 9Teaching Note(s): 8B17N003;Issues: start‐up valuation; valuation modelsIndustry: Other Services;Setting: India, Small organization, 2015Difficulty: MBA/PostgraduateLearning Objective: This case can be taught in a business valuation elective in MBA and executive programs. After completing the case, students should be able to:Analyze the options and determine the appropriate valuation model for young growth companies/start‐ups.Apply the model to a real‐world company to determine the value of the company.

9B16N069

Price or Relationship: SecureNow's DilemmaRipsy Bondia; Ashutosh Dash;

In April 2014, the founder of SecureNow met with one of his classmates who was now an angel investor. The two had recently met socially and the founder had briefed his classmate on SecureNow’s online business‐to‐business insurance marketplace. The classmate was now expressing interest in investing in SecureNow but his valuation was much lower than the founder’s expectation. The founder was confident of SecureNow’s future growth, but he wanted funds to expand. His classmate would provide him with the kind of relationship he was seeking with an investor, but the founder wondered how he and his classmate arrived at such different valuations. He also wondered whether he should accept the funds at a low valuation, consider other options, or just postpone his expansion plans.

Publication Date: December 19, 2016Discipline: Finance; Entrepreneurship; International;Product Type/Pricing: Case (Field), Standard CasePages: 13Teaching Note(s): 8B16N069;Issues: start‐up valuation, multiples, DCF, discounted cash flow, total beta, minority and illiquidityIndustry: Finance and Insurance;Setting: India, Small organization, 2014Difficulty: MBA/PostgraduateLearning Objective: This case is suitable for an MBA course in entrepreneurial finance and business valuation techniques, especially when valuing start‐ups. This case will help students appreciate the issues that arise when estimating the value of private companies, especially start‐ups, which have little financial history. The case provides sufficient data for students to make valuations using a discounted cash flow approach and a multiples approach (using both forward and trailing multiples). By working through this case, students will appreciate the assumptions that contribute to these calculations and understand why valuations will vary when using different methods. This case also presents a platform for students to learn about non‐pecuniary aspects of evaluating start‐up financing options.

9B16N071

The Bombay Stock Exchange: Liquidity Enhancement Incentive ProgrammesNupur Pavan Bang; Khemchand H. Sakaldeepi; Ramabhadran S. Thirumalai;

In 2013, the chief business officer at the Bombay Stock Exchange needed to prepare a recommendation on whether to pursue liquidity enhancement schemes in the equity cash market. The Bombay Stock Exchange, the oldest stock exchange in Asia, had held a monopoly in India until 1994, when the National Stock Exchange was launched. When derivatives were introduced to the Indian stock exchanges in 2000, the Bombay Stock Exchange had been unprepared, and the National Stock Exchange soon captured the entire derivatives market. In 2011, the Securities and Exchange Board of India approved the introduction of the Liquidity Enhancement Incentive Programmes on illiquid securities in the derivatives segment. The Bombay Stock Exchange then introduced the incentives for various illiquid products in the derivatives segment, but lost profit as a result of the incentives

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it paid out. Had the Liquidity Enhancement Incentive Programmes improved liquidity in the derivatives segment? Was it worth sacrificing profit to gain liquidity and market share? The chief business officer needed to address the long‐term benefits of liquidity enhancement schemes and the merits of introducing such schemes to the Bombay Stock Exchange’s equity cash market.

Publication Date: December 13, 2016Discipline: Finance; International;Product Type/Pricing: Case (Field), Standard CasePages: 16Teaching Note(s): 8B16N071;Issues: liquidity, payment for order, exchanges, market microstructure, stocksIndustry: Finance and Insurance;Setting: India, Large organization, 2013Difficulty: MBA/PostgraduateLearning Objective: This case is appropriate for an undergraduate or graduate course on security markets, with a specific focus on market liquidity and market structure. It may also be used in an undergraduate or graduate course on competitive strategy to illustrate how incentives can change competition, especially across two almost identical products: the National Stock Exchange’s Nifty Index and the Bombay Stock Exchange’s 100 Index. This case provides an alternative scenario to order‐driven markets, whereby a stock exchange is able to significantly improve liquidity by incentivizing traders to participate in its derivatives market. The case can also be used to revisit the basic terminologies in derivatives and the unique features of the Indian stock market. After completion of the case, students will be able todebate the importance of liquidity and how stock exchanges compete for liquidity;compare the purchase order concept prevalent in the United States with the liquidity incentives schemes introduced in India;analyze how liquidity incentive schemes can be used for the benefit of the entire securities market; andunderstand the basic terminology of derivatives and the unique features of Indian stock markets.

9B16N070

Tiger Airways: Buyout Offer from Singapore International AirlinesRuth S.K. Tan; Zsuzsa R. Huszar; Weina Zhang;

In January of 2016, Singapore International Airlines Group (SIA) announced that it had secured more than 90 per cent stake in Tiger Airways Holdings Limited (Tigerair), and would take Tigerair private. Once the buyout offer closed on February 19, trading in Tigerair’s shares would be suspended because the free float had fallen below the minimum 10 per cent threshold. Tigerair had been suffering losses amounting to more than SG$600 million from 2012 to 2015. When SIA initiated the buyout offer, Tigerair’s shareholders wanted to use the discounted cash flow model, the discounted dividend model, and relative valuation to determine whether the buyout was a fair deal.

Publication Date: December 13, 2016Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 10Teaching Note(s): 8B16N070;Issues: premium , delist , relative valuation, discounted cash flow, airlines

Industry: Transportation and Warehousing;Setting: Singapore, Large organization, 2016Difficulty: Undergraduate/MBALearning Objective: This case can be used to study comprehensive valuation in an advanced undergraduate or MBA course in corporate finance or financial management. The case presents opportunities for students tocompute the weighted average cost of capital;undertake a discounted cash flow valuation of a company, and perform sensitivity/scenario analysis on some of the assumptions;apply the discounted dividend model; andconduct a relative valuation analysis using various peer multiple methods.

9B16N068

Jumbo Group: Initial Public OfferingRuth S.K. Tan; Zsuzsa R. Huszar; Weina Zhang;

Jumbo Group Ltd. (Jumbo) was among Singapore’s leading food and beverage establishments. Founded in 1987, the group consisted of eight brands and operated 16 outlets—14 in Singapore and two in China. On October 28, 2015, Jumbo announced its initial public offering (IPO) of SG$22.06 million, consisting of two million retail shares and 86.23 million placement shares at SG$0.25 each. In this highly competitive market, the company’s chief executive officer and chairman was motivated to list Jumbo so it would have a bigger platform and better exposure to grow faster. He hoped a softer IPO market would attract more long‐term investors. Jumbo was clearly profitable, but based on its past financial performance, what would be a reasonable valuation for each of its shares? The case covers valuation using the discounted cash flow model, weighted average cost of capital, discounted dividend model, and relative valuation, as well as the computation of underpricing.

Publication Date: November 30, 2016Discipline: Finance; Entrepreneurship;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 11Teaching Note(s): 8B16N068;Issues: IPO, WACC, relative valuation, discounted cash flowIndustry: Finance and Insurance;Setting: Singpore, Medium organization, 2015Difficulty: Undergraduate/MBALearning Objective: This valuation case can be used in an advanced undergraduate or MBA course in corporate finance or financial management. It presents an opportunity for students toconsider benchmarks and conduct a financial statement analysis;compute the weighted average cost of capital;undertake a discounted cash flow valuation of a company;perform sensitivity/scenario analysis on some of the assumptions;apply the discounted dividend model;conduct a relative valuation analysis using various peer multiple methods; andexamine the degree of underpricing.

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9B16N066

Loren Rathbone's Investment: The Flashing Red LightBrian Lane;

In 2008, a retired farmer from Moose Jaw, Saskatchewan, was facing a challenging investment decision. He had recently met with a real estate investment representative about an opportunity near Edmonton, Alberta. The farmer understood land, but investing in real estate was new for him. The 11 per cent bond return that the representative enthusiastically described made the opportunity seem very appealing. On the other hand though, the farmer wondered if the return was too good to be true. On his farm equipment, a flashing red light usually meant something had gone wrong or was about to go wrong. Thinking about the investment, the farmer felt like a red warning light was flashing in his mind—something was not quite right. But perhaps his concern was unfounded. Should he make the investment?

Publication Date: November 29, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 7Teaching Note(s): 8B16N066;Issues: personal finance, high risk investments, real estate investments, customer service, land, bias, investment policy statement, know‐your‐product, KYP, know‐your‐customer, KYC, Ontario Securities CommissionIndustry: Real Estate and Rental and Leasing;Setting: Canada, Small organization, 2008Difficulty: Undergraduate/MBALearning Objective: This case is appropriate for classes in personal finance, investment, and portfolio management at both undergraduate and graduate levels. It can be used as a tool for class discussion and is ideal for graded assessment. After completing the case, students should be able tounderstand the realistic return range for low‐risk investments, well‐established stable companies, and higher‐risk opportunities;differentiate between a one‐sided sales pitch and unbiased information; anddeal with investment sales pressure, particularly when it is exerted by a friend or family member.

9B16N067

WideOpenWest: Financing the Knology AcquisitionJames Parrino;

In the spring of 2012, a U.S. Internet, cable television, and telephone service provider—owned by a private equity group—approached a bank holding company to participate as a co‐manager in a highly leveraged transaction in the cable industry. The transaction was the buyout of a smaller publicly traded cable company. The deal would require additional equity investment from the private equity group and a restructuring of the debt of both companies. Although the involved companies' management teams were excited about the opportunity, they knew that executing the deal would not be easy; the level of leverage would be the highest of any deal in the cable industry—or any industry—since before the 2007 economic downturn.

Publication Date: November 29, 2016Discipline: Finance;

Product Type/Pricing: Case (Field), Standard CasePages: 16Teaching Note(s): 8B16N067;Issues: acquisition financing, cable, debt, credit, leveraged buyoutIndustry: Information, Media & Telecommunications;Setting: United States, Large organization, 2012Difficulty: MBA/PostgraduateLearning Objective: The case is intended for graduate‐level students in a finance elective or higher‐level corporate finance course. The primary objective is to understand the internal process of bank holding companies in analyzing and approving complex, highly leveraged transactions. Specifically, after completing the case, students should be able toexplain the roles of various departments in bank holding companies;understand the risks and complexities of structuring a highly leveraged transaction from the perspective of the lender/underwriter; andapply corporate finance modelling techniques to build a simple leveraged buyout model for testing various capital structure assumptions.

9B16N065

Wonder Kidz FranchiseSachin Mittal; Nitin Tanted; Vinay Goyal;

In the spring of 2015, a marketing professor from Indore City in India was looking for an academic, entrepreneurial opportunity that would allow him to work alongside his wife. The professor came across a franchise proposal for a preschool with Delhi‐based Wonder Kidz Education Pvt. Ltd. The total investment in the project would be approximately ₹625,000, and cash profits would come in the first year. After discussing the opportunity with the company’s director, the professor was interested in taking on the franchise. However, not being an expert in finance, he was confused about the calculations and decided to seek an opinion on the financial feasibility of the project before making his decision.

Publication Date: November 23, 2016Discipline: Finance; Entrepreneurship; International;Product Type/Pricing: Case (Field), Standard CasePages: 6Teaching Note(s): 8B16N065;Issues: capital budgeting, cost of capital, NPV, net present valueIndustry: Educational Services;Setting: India, Small organization, 2015Difficulty: MBA/PostgraduateLearning Objective: This case is intended for first‐year postgraduate management students taking a course in financial management and undergraduate students taking courses in finance, specifically management accounting and financial management.The case highlights capital budgeting issues and the importance of capital budgeting to decision making. After completing the case, students should be able to do the following:Understand the concept of the cost of capital.Understand capital budgeting techniques and calculations, including discounting and non‐discounting.Analyze the financial viability of a project using capital budgeting techniques.

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9B16N064

UR Investing: The H&R REIT DecisionWalid Busaba; Saqib A. Khan;

In April 2014, a research analyst for UR Investing, an investment group from the University of Regina, in Saskatchewan, Canada, was contemplating the decision of investing in a real estate investment trust (REIT). The decision had strategic implications because it would affect the risk profile of the student‐managed fund. The analyst was given the task of evaluating the H&R REIT in particular and estimating a target price for H&R’s units. He had to carefully weigh the benefits in terms of returns generated against the risk of taking a position in the REIT. He had to analyze the strategic value of investing in REITs and decide whether to recommend that UR Investing should buy H&R units.

Publication Date: November 18, 2016Discipline: Finance;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 8Teaching Note(s): 8B16N064;Issues: REIT; valuation; investmentsIndustry: Finance and Insurance;Setting: Canada, Small organization, 2014Difficulty: Undergraduate/MBALearning Objective: This case can be taught in an MBA program in any of the following courses: investment analysis, portfolio management, alternative investments, and valuation. After completion of this case, students will be able to: understand real estate investment trusts;evaluate an investment opportunity in terms of risks and returns; andperform asset valuation with a focus on REITs.

9B16N063

A “Compelling and Pre‐emptive" Offer for the Valspar CorporationMark Simonson;

In May 2015, the chief executive officer (CEO) of the Valspar Corporation (Valspar) contacted the CEO of an industry competitor to discuss a potential strategic combination of the two companies. As discussions continued, Valspar’s board and senior management realized that an alternative strategic collaboration might be more beneficial, so Valspar then contacted the CEO of the second‐largest comparable firm in the industry, Sherwin‐Williams, which had previously expressed an interest in a business combination with Valspar. Valspar was awaiting a “compelling and pre‐emptive” offer from Sherwin‐Williams on an “accelerated timetable.” However, several questions remained. What maximum price could be justified in a bidding contest? What was the probability that antitrust regulators would eventually block the deal, resulting in a waste of time and resources to structure a deal that would later collapse? Could the negotiating teams for Valspar and Sherwin‐Williams structure the merger agreement to allow for a potential consent decree?

Publication Date: November 17, 2016Discipline: Finance;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 12Teaching Note(s): 8B16N063;Issues: M&A, valuation, mergers and acquisitions, antitrust,

mergerIndustry: Manufacturing;Setting: United States, Large organization, 2016Difficulty: Undergraduate/MBALearning Objective: This case is suitable for core corporate finance courses at the MBA level to illustrate firm valuation methods and adding value through mergers and acquisitions. The case is also suitable for courses in valuation, advanced corporate finance, and financial modelling at the MBA or undergraduate level. After completion of this case, students will be able to do the following: Determine how to value an acquisition candidate by incorporating any proposed synergies.Discuss how to assess a deal from the perspective of antitrust regulators.Outline the role of mergers and acquisitions advisors in the negotiating process and the use of fairness opinions.

9B16N059

Dividend Policy at Fuyao GlassHugh Thomas; Joyce L. Wang; Wu Yuhui;

The chief financial officer (CFO) of Fuyao Glass Industry Group., Ltd. had to recommend dividend distributions prior to the company’s global initial public offering in Hong Kong. Fuyao was China’s largest automotive‐glass manufacturer and the second‐largest, most profitable, and fastest‐growing automotive‐glass manufacturer in the world. Controlled by its founder and largest minority shareholder, Mr. Cho Tak Wong, Fuyao was in the midst of substantial global expansion into the United States and Russia. The CFO had to project cash flows from operations, as well as substantial investment needs and the potential effects of the IPO, all while taking into consideration the effect of Fuyao’s dividends on existing and planned investors.

Publication Date: November 09, 2016Discipline: International; Finance;Product Type/Pricing: Case (Field), Standard CasePages: 16Teaching Note(s): 8B16N059;Issues: dividend policy, automobile industry, corporate finance, leverage, ChinaIndustry: Manufacturing;Setting: China, Large organization, 2015Difficulty: Undergraduate/MBALearning Objective: This case is meant to be used in a corporate finance course at the senior undergraduate or MBA level. After completion of the case, students will learn and understand the following:The role of dividends in corporate financeHow dividend policy affects the value of a company and the wealth of shareholdersHow to make a dividend decision based on analysis of financial statements, pro forma statements, capital structure, and dividend policiesHow to interpret the effect of leadership style on corporate performance and value

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9B16N062

TTK Prestige: Economic Value Added AnalysisVarun Dawar; Rakesh Arrawatia; Arit Chaudhury;

In 2014, an analyst with a leading investment company wanted to evaluate the financial performance of a kitchen appliances company, TTK Prestige Ltd., headquartered in Bangalore, India. To accomplish this task, the analyst decided to use the economic value added (EVA)‐based performance measure, which accorded importance to value creation by management for its shareholders. Recently, there had been a shift away from traditional approaches of measuring shareholder value creation (e.g., earning capitalization and present value of estimated cash flow) towards more value‐added approaches like EVA, which offered a more effective method for evaluating financial performance.

Publication Date: November 09, 2016Discipline: International; Finance;Product Type/Pricing: Case (Field), Standard CasePages: 8Teaching Note(s): 8B16N062;Issues: economic value added, cost of capital, beta, cost of equityIndustry: Other Services;Setting: India, 2014Difficulty: Undergraduate/MBALearning Objective: This case can be used in a corporate finance course in an undergraduate or MBA program. It lends itself to a discussion of EVA methodology (including estimation of weighted average cost of capital) and its relevance. It would be particularly relevant after students have studied capital structure in a finance course. The case allows students to achieve the following objectives:Understand the concept and relevance of the EVA approachUnderstand the theory underlying the weighted average cost of capital and its use in the EVA approachUnderstand the nature and computation of the cost of equity including beta estimationUnderstand the concept of net operating profit after tax and its computationUnderstand the estimation of weighted average cost of capital and EVA for the target company

9B16N058

Has LIBOR Lost Its Stature in Derivatives Markets?Walid Busaba; Ken Mark;

In April 2016, a large U.S. proprietary trading group in New York, with a significant fixed‐income portfolio, was debating what discount rate to use to value the group’s interest‐rate swap portfolio. The counterparties to these swaps were major banks, and the deals were collateralized. Criticisms about the use of the London interbank offered rate (LIBOR) as a benchmark for valuing these swaps were circulating, and there were reports that LIBOR was being manipulated. There was talk about an alternative, nearly “risk‐free” reference rate that could potentially be launched during 2016. Was it time for the trading group to substitute some of its maturing LIBOR‐based interest‐rate swaps with overnight index swaps?

Publication Date: October 28, 2016Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 12

Teaching Note(s): 8B16N058;Issues: LIBOR, overnight indexed swap, interest rate swapsIndustry: Finance and Insurance;Setting: United States, Large organization, 2016Difficulty: Undergraduate/MBALearning Objective: This case has been designed for use at both the undergraduate and graduate levels and can be used in courses on international finance, investments, fixed‐income markets, and derivatives securities. After completing the case, students will have developed their ability to do the following:Appreciate the historical evolution of the LIBOR market and the recent scandals.Understand the differences between LIBOR and OIS rates.Identify why and how LIBOR or OIS would be used in valuing derivatives.Calculate forward interest rates from the zero yield curve.Value an interest‐rate swap.

9B16N057

Nielsonlar Insurance: Replacing a Life Insurance PlanNorma Nielson; Larry Wood;

In 2003, a financial planner in Calgary started working with the owner of Oilfield Welding Limited to provide employee benefits to the owner and his staff. Initially, the owner wanted to save for retirement by reinvesting all of his surplus earnings back into the business. However, he appreciated the potential creditor‐proofing of life insurance and established a small retirement savings opportunity using life insurance. When Oilfield Welding Limited hired a new group administrator, the employee benefits program was put out to bid and the business was moved. Shortly thereafter, the financial planner was notified that the life insurance he had placed on the owner of Oilfield Welding Limited and his wife would be replaced by two new policies as recommended by another advisor. Would it be beneficial for the clients to replace their existing insurance? How should the financial planner proceed?

Publication Date: September 29, 2016Discipline: Finance; Entrepreneurship;Product Type/Pricing: Case (Field), Standard CasePages: 17Teaching Note(s): 8B16N057;Issues: personal finance, financial advisor, financial planning, life insurance, policy, employee benefits, ethics, registered retirement savings plan, RRSP, registered retirement income fund, RRIF, Alberta, term life insuranceIndustry: Finance and Insurance;Setting: Canada, Small organization, 2015Difficulty: Undergraduate/MBALearning Objective: This case is intended for senior undergraduate students as well as graduate students in business disciplines such as finance that deal with personal financial planning situations and regulation. The case represents a comprehensive, real‐life situation faced by a financial advisor. After completing this case, student will be able to do the following:Analyze financial and policy dataConsider alternative approaches to client concernsIdentify the criteria needed to make informed decisionsDevelop an action plan for clientsUnderstand some of the ethical dilemmas faced in the life insurance industry

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9B16N016

Socially Responsible Investment Funds in France: Regulations and Retail (A)Diane‐Laure Arjalies; Ken Mark;

In 2012, the French government was faced with the challenge of setting the standards for socially responsible investment funds. A broader issue was the set of roles and responsibilities that regulators needed to take to ensure the best interest of society and the retail market. Retail consumers were different from institutional clients because they were numerous, they may not have had access to the same information available to more sophisticated investors, and because their thoughts on the financial markets were most likely to be based on what they had read and heard in the news. The government had to decide how to go about creating standards that could be applied to socially responsible investment funds. Also see supplement 9B16N017.

Publication Date: September 29, 2016Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 12Teaching Note(s): 8B16N016;Issues: Social responsibility, investment, industry, standards, collaboration, SRIIndustry: Public Administration;Setting: France, Large organization, 2012Difficulty: Undergraduate/MBALearning Objective: The case is suitable for use in an MBA or EMBA class in a finance or strategy course to illustrate the difficulties in reaching an agreement on a common standard. After completion of the case, students will understand the challenges represented by competing standards and the diverse interests and incentives of various players in the industry.

9B16N017

Socially Responsible Investment Funds in France: Regulations and Retail (B)Diane‐Laure Arjalies; Ken Mark;

Supplement for product 9B16N016.

Publication Date: September 29, 2016Discipline: Finance; International;Product Type/Pricing: Supplement, Standard SupplementPages: 7Teaching Note(s): 8B16N016;Issues: Social responsibility, investment, industry, standards, collaboration, SRIIndustry: Public Administration;Setting: France, Large organization, 2012Difficulty: Undergraduate/MBALearning Objective: The case is suitable for use in an MBA or EMBA class in a finance or strategy course to illustrate the difficulties in reaching an agreement on a common standard. After completion of the case, students will understand the challenges represented by competing standards and the diverse interests and incentives of various players in the industry.

9B16N056

Ambuja Cements and Holcim India MergerPitabas Mohanty; Tina Stephen; Supriti Mishra;

On July 24, 2013, the management of Ambuja Cements Limited announced the merger of Holcim (India) Private Limited with Ambuja Cements in a two‐stage process. First, Ambuja Cements would buy a 24 per cent stake of Holcim (India) from Holderind Investments Ltd. of Mauri us for ₹35 billion. Subsequently, Holcim (India) would be merged with Ambuja Cements. The management of Ambuja Cements projected huge synergy from the merger, whereas proxy firm advisors called it corporate misgovernance. The case gives students an opportunity to analyze this two‐step transaction to determine whether it compromised the interests of minority shareholders. The case also presents an opportunity to estimate the marginal impact of the transfer of cash and the cancellation of shares on the stock price of the acquiring company.

Publication Date: September 20, 2016Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 11Teaching Note(s): 8B16N056;Issues: mergers and acquisitions, corporate governance , Indian promoters , exchange ratio in mergerIndustry: Manufacturing;Setting: India, Large organization, 2013Difficulty: MBA/PostgraduateLearning Objective: Mergers in India are usually intra‐group mergers and this sometimes complicates the analysis of the merger. The same promoter controls the shares of both companies, and special adjustments are required while computing the post‐merger number of shares and performing the accretion‐dilution analysis. This case presents an opportunity for the instructor to discuss with students how such mergers can be analyzed. This case should ideally be discussed in mergers and acquisitions or business valuation courses in a graduate‐level program. This case can also be discussed in an advanced corporate finance course, where mergers and acquisitions are covered as a separate module.

9B16N052

Spin Master Toys: Going Public‐the IPO ProcessEric Morse; Michael R. King; Ryan Quirt;Ramasastry Chandrasekhar;

Spin Master, a children’s toy and entertainment company, was getting ready for an initial public offering (IPO). Its founders were weighing their options with regard to some core issues: What was the right positioning for Spin Master with potential investors? What was the right approach to valuing the business? How did that approach translate into enterprise value, equity value, and share price for the IPO?

Publication Date: September 19, 2016Discipline: Finance; Entrepreneurship;Product Type/Pricing: Case (Field), Standard CasePages: 18Teaching Note(s): 8B16N052;Issues: initial public offering, enterprise valueIndustry: Retail Trade;Setting: Canada; United States, Medium organization, 2015Difficulty: MBA/Postgraduate

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Learning Objective: The case can be used in both degree and executive education programs in entrepreneurship, finance, strategy and marketing courses with the following objectives: Demonstrate the IPO process through its various phasesAnalyze the motivations and objectives behind pursuing an IPOTackle decisions related to IPO and take individual stances on positioning and valuationEvaluate positioning with investorsAssess valuation and appropriate value methodologies

9B16N054

Talbros Automotive Components Limited: Relative ValuationUmang Gupta; Monika Chopra;

In 2015, an ancillary client of a leading investment bank based in New Delhi, was looking to increase revenues from the two‐wheeler and four‐wheeler vehicle segments by acquiring customers that were original equipment manufacturers. A financial analyst was assigned the task of evaluating the options and identifying the right target to acquire for the client. The analyst used comparable company analysis and comparable transaction analysis, as well as valuation ratios (enterprise value‐to‐sales; enterprise value‐to‐earnings before interest, tax, depreciation, and amortization; and price‐to‐earnings per share) to arrive at Talbros Automotive Components Limited as the best target for the client. For comparable company analysis, the analyst also compiled a list of four publicly traded firms that were similar to Talbros Automotive Components Limited. The analyst needed to arrive at the final valuation range by combining the results of both techniques (i.e., comparable company analysis and comparable transaction analysis), which could be achieved by using a football field analysis.

Publication Date: August 31, 2016Discipline: Finance; International;Product Type/Pricing: Case (Field), Standard CasePages: 16Teaching Note(s): 8B16N054;Issues: valuation, EV/EBITDA, EV‐to‐earnings, P/E ratio, acquisitions, original equipment manufacturer, takeover premium, control premium, fair value, comparable transactionIndustry: Manufacturing;Setting: India, Medium organization, 2015Difficulty: MBA/PostgraduateLearning Objective: This case is ideal for use in finance classes at the graduate level. The case focuses on teaching students to:Use comparable company analysis and comparable transaction analysis for valuation of a firm.Identify a group of comparable firms and understand how to compare firms by using various financials on a year‐on‐year basis.Compute the control premium by evaluating firms that have undergone a merger in a sector.Develop a conceptual understanding of how the comparable company/transaction method may differ from the discounted cash flow valuation method.Become familiar with the use of the football field method to calculate the final value of a firm.

9B16N051

Shriram Transport FinanceGennaro Bernile; Anand Shankar; Rahul Rajani;

In December 2012, the stock of Shriram Transport Finance Company (STFC) had just breached the ₹750 mark, signifying an appreciation of close to 80 per cent for the calendar year of 2012. Texas Pacific Group (TPG), the global private equity firm, had invested in STFC at a time when the share price was hovering around ₹100. As was the case with most private equity firms, a successful exit from an investment was of paramount importance for TPG in order to reap handsome returns. In the course of charting the exit path from an investment, private equity firms had to consider several critical issues including exit structure, timeline for exit, and regulatory hurdles. There were three usual choices of exit routes: initial public offering, trade sale, or secondary sale. Each of the exit routes had its own advantages and disadvantages. Was this the right time for TPG to exit STFC? If yes, which option should TPG pursue?

Publication Date: August 26, 2016Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 12Teaching Note(s): 8B16N051;Issues: exit timing, private equity, exit optionsIndustry: Finance and Insurance;Setting: India, Large organization, 2013Difficulty: MBA/PostgraduateLearning Objective: This case is suitable for courses covering private equity and venture capital in an MBA program. After completion of the case, students will be able to evaluate the perspective of a general partner at a private equity firm;discuss the key strategies used by financial sponsors to manage a successful investment;explore three key drivers of a private equity deal with respect to identifying the right investment opportunity; andevaluate different exit options and timing to arrive at a rich valuation on exit.

9B16N039

High‐Impact Wealth Management: Aamara Maxes Out the Credit CardsChuck Grace; Paige Addesi;Matt Lord;

The High‐Impact Wealth Management case series is a portfolio of cases that are built around the high‐impact theme. Each case in the series can stand on its own to deliver a unique learning objective; but, taken together, the cases are designed to cover all seven topics covered in the list of “common‐cents” strategies.

Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 10Teaching Note(s): 8B16N039;Issues: personal debt, credit cardsIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Aamara Maxes Out the Credit Cards” specifically addresses item 5 on the list of

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"common‐cents" strategies: minimize fees and taxes.

9B16N045

High‐Impact Wealth Management: Andrew Puts A Ring On ItChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 7Teaching Note(s): 8B16N045;Issues: family lawIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Andrew Puts a Ring on It” specifically addresses issues associated with family law.

9B16N050

High‐Impact Wealth Management: HomecomingChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 4Teaching Note(s): 8B16N050;Issues: wealth managementIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Homecoming” specifically addresses issues associated with retirement, furthering education, philanthropy, and legacies.

9B16N043

High‐Impact Wealth Management: Jenny and Andrew Confront MortalityChuck Grace; Paige Addesi;Matt Lord;

The High‐Impact Wealth Management case series is a portfolio of cases that are built around the high‐impact theme. Each case in the series can stand on its own to deliver a unique learning objective; but, taken together, the cases are designed to cover all seven topics covered in the list of “common‐cents” strategies. Also refer to 9B16N044.

Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 8Teaching Note(s): 8B16N043;Issues: life insurance, disability insuranceIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Jenny and Andrew Confront Mortality” specifically addresses item 6 on the list of “common‐cents” strategies: avoid catastrophic risk—risk that would impede your wealth—by acquiring insurance for unforeseeable events that cannot be self‐insured and that would decimate your wealth.

9B16N048

High‐Impact Wealth Management: Jenny and Andrew Consider a WillChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 8Teaching Note(s): 8B16N048;Issues: wills, estate planning, powers of attorneyIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Jenny and Andrew Consider a Will” specifically addresses item 6 on the list of “common‐cents” strategies: avoid catastrophic risk—risk that would impede your wealth—by acquiring insurance for unforeseeable events that cannot be self‐insured and that would decimate your wealth.

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9B16N041

High‐Impact Wealth Management: Jenny and Andrew Pick an AdvisorChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 8Teaching Note(s): 8B16N041;Issues: financial adviceIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Jenny and Andrew Pick an Advisor” specifically addresses item 7 on the list of “common‐cents” strategies: seek good advice. Good advisors help define goals, encourage saving, mitigate behavioural risk, and know how to reduce fees and taxes.

9B16N032

High‐Impact Wealth Management: Jenny Li's Mix at RiskChuck Grace; Paige Addesi;Matt Lord;

The High‐Impact Wealth Management case series is a portfolio of cases that are built around the high‐impact theme. Each case in the series can stand on its own to deliver a unique learning objective; but, taken together, the cases are designed to cover all seven topics covered in the list of “common‐cents” strategies. Also refer to 9B16N033 and 9B16N034.

Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 11Teaching Note(s): 8B16N032;Issues: risk tolerance, behavioural financeIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Jenny’s Mix at Risk” specifically addresses item 4 on the list of “common‐cents” strategies: be aware that your behaviour drives risk.

9B16N037

High‐Impact Wealth Management: Jenny's Investment ChoicesChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 13Teaching Note(s): 8B16N037;Issues: investment fees; taxesIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Jenny’s Investment Choices” specifically addresses item 5 on the list of "common‐cents" strategies: minimize fees and taxes.

9B16N046

High‐Impact Wealth Management: To Buy or Not To BuyChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 11Teaching Note(s): 8B16N046;Issues: mortgagesIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “To Buy or Not To Buy” specifically addresses issues associated with mortgages, home buying, and debt management.

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9B16N040

High‐Impact Wealth Management: Uncle Richard Complains to the OmbudsmanChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 25, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 17Teaching Note(s): 8B16N040;Issues: high‐impact wealth managementIndustry: Educational Services;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Uncle Richard Complains to the Ombudsman” is intended to be an integration case that brings many concepts together in one case.

9B16N022

Applied Mobile Labs: Valuation of a Start‐UpJaslene Kaur Bawa; Vinay Goyal; S.K. Mitra;

An angel investor had invested seed capital in a start‐up company that aggregated and sold value‐added services for mobile telecommunications in India. The company had done well since its inception in 2009, but the revenue growth figures reported for 2014 were concerning. According to the performance report, the start‐up had grown 12 per cent in 2014—less than half of the estimated industry revenue growth figure for mobile value‐added services. The investor wondered if his investment was profitable despite the negative cash flows and significant lifetime company losses incurred during the first three years of operation. Should the investor stay invested with, or divest from, the start‐up? What would the company’s exit value be?

Publication Date: August 24, 2016Discipline: Finance; International;Product Type/Pricing: Case (Field), Standard CasePages: 13Teaching Note(s): 8B16N022;Issues: MVAS valuation venture, capital DCF, startup FCFF, finance discount rate, valuation, investingIndustry: Information, Media & Telecommunications;Setting: India, Small organization, 2015Difficulty: Undergraduate/MBALearning Objective: This case is ideal for MBA students who have already studied conventional methods of valuation, such as discounted cash flow and market multiples. The case can also be used at an undergraduate level in an elective course in entrepreneurial or corporate finance. After completion of this case, students will be able tounderstand how angel investors and venture capitalists value start‐up firms;use data and statistical methodology to demonstrate the use of a variation of the discounted cash flow method of valuation;understand that a top‐down, free cash flow to firm model is a

better alternative to conventional methods of valuation, especially for start‐ups in the technology sector; andassess a company’s value, the investor’s projected returns, and the company’s exit values with calculations.

9B16N026

High‐Impact Wealth Management: Andrew Does the MathChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 24, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 8Teaching Note(s): 8B16N026;Issues: time value of moneyIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Andrew Does the Math” specifically addresses item 2 on the list of “common‐cents” strategies: time value of money (or save).

9B16N030

High‐Impact Wealth Management: Andrew Finds His MixChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 24, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 9Teaching Note(s): 8B16N030;Issues: asset allocationIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Andrew Finds His Mix” specifically addresses item 3 on the list of “common‐cents” strategies: asset mix (or adjust the asset mix to drive returns).

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9B16N035

High‐Impact Wealth Management: Andrew Takes ShelterChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 24, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 6Teaching Note(s): 8B16N035;Issues: RRSP; TFSA; RESP; PensionsIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Andrew Takes Shelter” specifically addresses item 5 on the list of “common‐cents” strategies: minimize fees and taxes.

9B16N023

High‐Impact Wealth Management: Jenny Looks to the FutureChuck Grace; Paige Addesi;Matt Lord;

The High‐Impact Wealth Management case series is a portfolio of cases that are built around the high‐impact theme. Each case in the series can stand on its own to deliver a unique learning objective; but, taken together, the cases are designed to cover all seven topics covered in the list of “common‐cents” strategies. Also refer to 9B16N024 and 9B16N025.

Publication Date: August 24, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 4Teaching Note(s): 8B16N023;Issues: goal based investingIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Jenny Looks to the Future” specifically addresses item 1 on the list of “common‐cents” strategies: goals‐based investing (or start with the end in mind).

9B16N028

High‐Impact Wealth Management: Tom and Deena Li Plan for RetirementChuck Grace; Paige Addesi;Matt Lord;


Publication Date: August 24, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 8Teaching Note(s): 8B16N028;Issues: RetirementIndustry: Finance and Insurance;Setting: Canada, 2016Difficulty: UndergraduateLearning Objective: The case entitled “Tom and Deena Plan for Retirement” specifically addresses items 2 and 5 on the list of “common‐cents” strategies: time value of money (or save), in the context of retirement planning.

9B16N021

Fraud at Bank of Baroda: Manage Risk or Manage CrisisSanjay Dhamija;

Bank of Baroda was the second‐largest commercial bank in India, but it was struggling with a decline in profits and an increase in non‐performing assets. Only a week before the new chief executive officer's term commenced, Bank of Baroda was in the news due to reports of fraud occurring at the bank’s Ahmedabad and New Delhi operations. The frauds involved bill discounting schemes and money laundering. The bank’s violations of its "know your client" and anti‐money laundering standards raised concerns about its risk management practices—or lack of such practices. The new chief executive officer was only the second executive from the private sector to head a public sector bank. He needed to prove his value in the world of public sector banking by managing the crisis, implementing a strategy to stabilize the bank’s financial health, and preventing a recurrence of the problems.

Publication Date: August 05, 2016Discipline: Finance; Entrepreneurship; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 9Teaching Note(s): 8B16N021;Issues: Indian banking system, anti‐money laundering, risk managementIndustry: Finance and Insurance;Setting: India, Large organization, 2015Difficulty: MBA/PostgraduateLearning Objective: The case is intended for MBA courses on bank management, especially those involving management of financial services and risk. It can be used to develop an understanding of "know your client" and anti‐money laundering policies as integral components of operational risk management, and the risks that arise when the guidelines are not followed. More specifically, the caseprovides an overview of risk management functions in a large

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bank with multiple locations;highlights the importance of "know your client" and anti‐money laundering norms for a bank, and the key issues in implementing risk policies;explores the interrelationship between the different types of risks that a bank faces, including operational, credit, reputational, regulatory, and liquidity risks; andemphasizes the consequences of poor risk management as well as how to respond to a crisis situation.

9B16N020

Keppel Corporation's Buyout Offer for Keppel LandRuth S.K. Tan; Zsuzsa R. Huszar; Weina Zhang;

On January 21, 2015, a trading halt was placed on the shares of Keppel Corporation (Keppel Corp) and Keppel Land Limited (Keppel Land). On January 23, 2015, Keppel Corp announced an offer to take its subsidiary, Keppel Land, private. At the time of the offer, Keppel Corp already owned 54.6 per cent of Keppel Land. The buyout offer used a two‐tier pricing approach with a higher price paid if Keppel Corp acquired a threshold number of shares. Keppel Corp would have the right to receive any distribution that might be declared, paid, or made by Keppel Land on or after the purchase date. The offer was scheduled to close on March 12, 2015. On February 2, 2015, Keppel Land appointed KPMG Corporate Finance Pte. Ltd. as the financial adviser to the independent company directors regarding the offer. Minority shareholders of Keppel Land were interested in evaluating Keppel Corp’s offer and examining its motivations. This would require that they compute the premium and net present value of the company, as well as analyze the revenue and cost synergies of the buyout.

Publication Date: July 18, 2016Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 12Teaching Note(s): 8B16N020;Issues: WACC, premium, buyout, relative valuation, discounted cash flowIndustry: Real Estate and Rental and Leasing;Setting: Singapore, Large organization, 2015Difficulty: Undergraduate/MBALearning Objective: This comprehensive valuation case can be used in corporate finance or financial management courses at the undergraduate and graduate level. It presents an opportunity for students to do the following:Understand the real estate industry.Review the discounted cash flow valuation of an entire company, including an estimation of the free cash flows, revenue growth rates, terminal growth rates, and appropriate weighted average cost of capital.Perform sensitivity/scenario analyses on some of the assumptions.Conduct a relative valuation analysis using various multiples derived from peer groups.

9B16N019

The Pipeline Company: Financing for China's MNGPPXiuqin Wang; Ming Jian;

In 2008, the Multinational Natural Gas Pipeline Project was sponsored by China National Group Corporation to undertake a major international infrastructure project in Asia. The Pipeline Company, a wholly owned subsidiary of China National Group Corporation, established joint ventures with the host countries and took the lead in financing the project, which was required to be completed by the end of 2009. Initial investments and procurements were made, and payment would soon be due. However, there was a large gap between the estimated total investment and the funds available. Numerous banks expressed interest in the pipeline project, but most required the sponsor to provide a guarantee for the project’s loan. Some banks also asked for an increase in the capital ratio from less than 1 per cent to 20 per cent. The treasurer responsible for the financing of the project was now tasked with the issue of arranging the most effective way to finance the project.

Publication Date: July 14, 2016Discipline: Finance; International;Product Type/Pricing: Case (Field), Standard CasePages: 9Teaching Note(s): 8B16N019;Issues: project finance, investment, corporate finance, guaranteeIndustry: Construction;Setting: China, Large organization, 2008Difficulty: Undergraduate/MBALearning Objective: This case is suitable for project financing courses and credit management courses at both the undergraduate and graduate levels. It covers project and corporate financing issues and the role of governance in joint ventures. It can also be used to discuss risks that banks face in financing projects and how to manage those risks. The case should be of particular interest to MBA and EMBA students who have work experience in the business world. After completion of the case, students will be able toexplore financing issues in the corporate world and develop insights into project financing and corporate financing;examine mechanisms through which project financing can be realized with higher leverage and limited recourse to sponsors;understand the risks of foreign investment and ways to mitigate the risks through financing arrangements; andappreciate the role of project financing in international investments by joint ventures.

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9B16N018

Buck Auto Care Products: Selling a Private CompanyStephen R. Foerster; Ken Mark;

The chief financial officer (CFO) of Buck Auto Care Products (Buck’s), a Toronto‐based manufacturer and distributor of premium car care products, had to prepare for a meeting with the company’s vice‐president (VP) of sales and the VP of manufacturing. The staff had heard rumours that the company was for sale, but no one had received any confirmation until now. The company was founded in 1975 as a chain of car‐wash stands in Toronto and Mississauga, and in order to supplement the chain’s income, Buck's created a line of complementary automotive care products, which eventually became the sole focus of the business. A competitor was interested in buying the company. As the CFO prepared a response to the competitor's offer, she thought about the various issues she had to consider before coming up with a valuation.

Publication Date: July 06, 2016Discipline: Finance; Entrepreneurship;Product Type/Pricing: Case (Gen Exp), Standard CasePages: 10Teaching Note(s): 8B16N018;Issues: mergers and acquisitions, accounting disclosures, valuation, management preferences, family‐owned enterpriseIndustry: Manufacturing;Setting: Canada, Small organization, 2016Difficulty: Undergraduate/MBALearning Objective: This case has been designed for use at both the undergraduate and graduate levels and can be used in finance or entrepreneurship courses to address managing the sale of a private firm, understanding competitive dynamics, and valuation.

9B16N008

Toyota's Innovative Share Issue (2015)Emir Hrnjić;

In June 2015, the Toyota Motor Corporation’s annual shareholders’ meeting included a proposal regarding Toyota’s new share issue. Named “Model AA” shares after the company’s first passenger car, the shares would offer investors new hybrid securities. This proposal created a lot of controversy among existing shareholders. Although President Toyoda claimed that no one would be disadvantaged by these shares, it remained unclear how many shareholders had confidence in this assurance. The share issue, which would potentially comprise up to 5 per cent of Toyota’s total outstanding shares, would require the support of a two‐thirds majority of shareholders. The new shares looked like ordinary shares with a “lock‐up” period or preferred shares with voting rights. At the same time, Model AA shares resembled a convertible debt issue with voting rights (with a conversion ratio to be determined later). It was time to vote on the approval of Toyota’s new share issue, but the following questions lingered in the shareholders’ minds: What exactly was the difference between Model AA shares and ordinary shares? What was the difference between Model AA shares and bonds (or convertible bonds)? Finally, if the vote was approved, how should Model AA shares be priced?

Publication Date: June 27, 2016Discipline: Finance; International;

Product Type/Pricing: Case (Field), Standard CasePages: 13Teaching Note(s): 8B16N008;Issues: share issue, primary market, SEO, seasoned equity offering, retail investors, innovation, convertible issue, capital raising, fundraisingIndustry: Manufacturing;Setting: Japan, Large organization, 2015Difficulty: Undergraduate/MBALearning Objective: This case is designed for a course in corporate finance on the topic of raising funds via innovative share issues. Named “Model AA,” this share issue exemplifies a hybrid securities issue—a blend of a five‐year convertible bond issue and an ordinary share issue (with a “lock‐up” period). The case includes the pricing of AA shares. Furthermore, the case also allows for a discussion of Asian markets (in particular, the Japanese market) and differences between Japanese and international investors.

9B16N014

GMR Airport Concession: Mumbai Versus DelhiAbhilash Nair; Rajesh Srinivas Upadhyayula;

In 2004, bids were invited from airport developers and operators for the development and operation of Mumbai’s Chattrapati Shivaji International Airport and Delhi’s Indira Gandhi International Airport. On January 31, 2006, a consortium led by GMR Group (GMR) was selected as the only technically qualified bidder. However, in order to avoid a monopoly in Indian airport operations, GMR was asked to choose between the two airports and match the financial bid of another bidder that was not technically qualified for the work. The Delhi airport, the pride of the National Capital Region, would serve as a gateway for participants, dignitaries, and other guests arriving for the upcoming Commonwealth Games to be held in New Delhi in October 2010. However, the Mumbai airport was the gateway to business investments in India. GMR faced a difficult choice between a mission‐critical airport in the National Capital Region or an airport in India’s commercial capital. Which airport would give GMR an edge in the global aviation sector? Which choice was in line with GMR’s vision?

Publication Date: May 25, 2016Discipline: Finance; International; Entrepreneurship;Product Type/Pricing: Case (Field), Standard CasePages: 15Teaching Note(s): 8B16N014;Issues: project financing, strategic flexibility, airport, infrastructure, real optionsIndustry: Transportation and Warehousing;Setting: India, Medium organization, 2006Difficulty: MBA/PostgraduateLearning Objective: The case addresses how strategic flexibility enables entrepreneurs to evaluate decisions concerning investment in major projects involving utilities, where the pricing is regulated. The case is intended to emphasize the following learning objectives:Understanding of the intricacies of capital investment in the context of an industry characterized by heavy investment, long gestation, a finite time horizon, and a regulated revenue model:Building on fundamental knowledge in project appraisal techniques, such as net present value, internal rate of return (IRR), and modified IRR, and evaluating feasibility at the bidding stage;

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Appreciating the nature of managerial flexibilities available in long gestation projects; andDemonstrating the application of simulation as a means to value managerial flexibilities embedded in a project through an illustrative example.

9B16N012

Amtek Auto Ltd.: From Acquisitions to a Financial CrisisGaurav Singh Chauhan; Gunjan Tomer;

In the summer of 2015, India‐based Amtek Auto Ltd., one of the country’s largest companies in the manufacturing of automotive components, was on the brink of financial ruin. After more than a decade of being immersed in a spending spree on acquisitions to build capacity and expand its clientèle in both the European and Asian auto markets, Amtek’s stock plummeted by 50 per cent within two days as nervous investors worried about the company’s ability to make its scheduled debt payments. Tensions were high as the company faced mounting pressure over its liquidity issues, and after reporting a net loss for the first time in two decades. With rumours of bankruptcy on the horizon, what steps could the company take to decrease its debt burden at a time when the automotive industry was in a slump? Should Amtek consider selling off some of its assets to raise the needed cash, or should it look to banks and investors?

Publication Date: May 24, 2016Discipline: Finance; International;Product Type/Pricing: Case (Pub Mat), Standard CasePages: 17Teaching Note(s): 8B16N012;Issues: capital structure , financing decisions, operating leverage , financial leverage, automotiveIndustry: Manufacturing;Setting: India, Large organization, 2015Difficulty: MBA/PostgraduateLearning Objective: This case is suitable for use in MBA and other graduate‐level management programs in courses in corporate finance, strategic fiscal management, and debt financing. Within corporate finance settings, this case could be used in the capital structure decisions module to study the development of a firm’s debt policies in light of the costs and benefits of debt. After completion of the case, students will be able to:Identify the drivers of business and financial pitfalls.Understand the trade‐off of leverage in terms of cost and benefit of debt.Identify the links between a firm’s investment, capital structures, and dividend decisions.Appreciate the strategies to generate cash flows for a firm by managing assets and liabilities.

9B16N015

IndusInd Bank: Residual Income ValuationVarun Dawar; Rakesh Arrawatia; Saumya Ranjan Dash; Arit Chaudhury;

In early 2013, an analyst at an insurance company was examining whether IndusInd Bank, a mid‐size bank in India, would be a good investment for the insurance fund’s equity portfolio. From January 2008 until March 30, 2013, the bank’s stock had tripled under its new management. The analyst wondered whether deploying funds in the bank would yield any significant returns. He decided to use the available financial information and the residual income valuation method to forecast the company’s stock price.

Publication Date: May 24, 2016Discipline: Finance; International;Product Type/Pricing: Case (Field), Standard CasePages: 7Teaching Note(s): 8B16N015;Issues: Valuation , residual income, cost of equity , terminal valueIndustry: Finance and Insurance;Setting: India, Large organization, 2013Difficulty: Undergraduate/MBALearning Objective: This case is suitable for use in an undergraduate or graduate course on valuation. Students are introduced to the use of residual income valuation methodology to identify a potential investment target. Two Microsoft Excel documents are also available: a student spreadsheet and an instructor spreadsheet. After completion of the case, students will be able to do the following: Use a strengths, weaknesses, opportunities, and threats analysis to determine the opportunities and risks associated with a potential investment target.Understand the key assumptions and mechanics of the residual income valuation methodology.Perform a valuation of stocks using the residual income valuation methodology.

9B16N013

The Italian Bakery: The Sweet DecisionElizabeth M.A. Grasby; Trina Ruthes;

The account manager of a bank was reviewing a loan request from a producer and distributor of bread loaves and rolls. This long‐term loan would be used to fund a strategic expansion that was set to begin as soon as the loan was approved. The expansion would allow the bakery to add two new product lines in order to boost sales. The account manager, a long‐time family friend of the client, had to ensure that granting the loan request would be financially feasible for the bank. In order for the proposed expansion to begin on schedule, the banker would have to make his decision within the next few days.

Publication Date: May 20, 2016Discipline: Finance;Product Type/Pricing: Case (Field), Standard CasePages: 12Teaching Note(s): 8B16N013;Issues: Financial projections, loan evaluation, sensitivity analysis, qualitative, working capital requirements, quantitative, cash flowIndustry: Accommodation & Food Services;Setting: Canada, Small organization, 2015

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