"Case Problems in Finance" is a Harvard case course presenting real business situations that pose debatable alternative courses of action. The cases contain problems that can be narrowed but not always settled by the usual techniques of financial analysis. It will teach students to discover ways of thinking that are productive in handling different types of managerial problems intelligently. The cases are grouped by major topics: financial analysis and forecasting, cost of capital, working capital management, capital budgeting, dividend policy, debt policy, financial execution, and mergers and restructuring.
* signifies a new case Part 1: Financing Current Operations Introductory Exercises Financial Ratio Analysis Assessing a Firm's Future Financial Health Forecasting Pro Forma Financial Statements Tire City, Inc. * Estimating Funds Requirements -- Short-term Sources of Funds Funding Growth Butler Lumber Company *Note on Bank Loans Funding Seasonal Needs Toy World, Inc. Funding Cyclical Needs SureCut Shears, Inc. Managing Working Capital Dell's Working Capital * Cash Budgeting Hampton Machine Tool Part II: Capital Structure, Long-Term Financing and Risk Management Debt Policy and Long-Term Financing Target Debt Policy E.I. DuPont de Nemours and Company (1983) Costs of Financial Distress Williams Company *The Loewen Group, Inc. (Abridged) * Capital Structure Decisions American Home Products Corporation Debt Policy at UST *Diageo plc * Earnings Impact of Leverage Continental Carriers, Inc. Pricing Debt Instruments Fixed Income Valuation * Credit Ratings and Access to Debt Markets Hospital Corporation of America (A) Equity Financing Stone Container Corporation (A) * Equity-Linked Securities MCI Communications Corporation (1983)Cox Communications * Cross-Border Financing Compania de Telefonos de Chile Cash Distribution Dividend Policy at FPL Group, Inc. (A) Recapitalization Ford's Value Enhancement Plan * Event Risk Marriott Corporation (A) Derivative Instruments and Risk Management Basic Derivative Instruments Introduction to Derivative Instruments Valuing Derivatives Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) * Interest Rate Derivatives Student Educational Loan Fund, Inc. (Abridged) * Options and Security Design Arley Merchandise Corporation * Pension Fund Risk Management The Pension Plan at Bethlehem Steel, 2001 * Risk Identification and Selection of Risk-Management Techniques Tiffany & Company (1993)United Grain Growers Limited (A) * Part III: Valuation and Investment Valuing and Selecting Investment Opportunities Discounted Cash Flow Analysis Valuing Capital Investment Projects * Introduction to Decision Trees Merck & Company: Evaluating a Drug Licensing Opportunity* Basic Value Creation Tree Values* Identifying Incremental Cash Flows The Super Project Forecasting Expected Cash Flows Netflix.com, Inc. *A-Rod: Signing the Best Player in Baseball * Capital Budgeting Ocean Carriers *Whirlpool Europe * Multiples Health Development Corporation * Cost of Capital and Valuation Cost of Capital Diversification, the Capital Asset Pricing Model, and the Cost of Equity Capital Capital Asset Pricing Model and the Cost of Equity Capital Ameritrade Holding Corporation, 1997 * Risk and the Opportunity Cost of Capital Pioneer Petroleum Corporation Leveraged Betas Leveraged Betas and the Cost of Equity Capital W eighted Average Cost of Capital Marriott Corporation: The Cost of Capital (Abridged)Lex Service PLC: Cost of Capital * Valuation Alternatives Free Cash Flow Valuation Methods: Weighted Average Cost of Capital (WACC) and Adjusted Present Value (APV) *Capital Cash Flows: A Simple Approach to Valuing Risky Cash Flows * Advanced Valuation Valuing Projects and Businesses Radio One, inc. *American Chemical Corporation Valuing Companies Adecco SA's Acquisition of Olsten Corporation *Cooper IndustriesInterco Initial Public Offering Eskimo Pie Corporation (Abridged) *Netscape's Initial Public Offering Hostile Takeovers Gulf Oil Corporation -- TakeoverPhilip Morris Companies and Kraft, Inc. Highly Leveraged Transactions John M. Case CompanyCongoleum Corporation (Abridged)RJR Nabisco Real Options Laura Martin: Real Options and the Cable Industry *Arundel Partners: The Sequel ProjectCapital Projects as Real Options: An Introduction Part IV: Review and Synthesis Integrated Financial Decisions and Comprehensive Review Staged Equity Financing Pharmacyclics: Financing Research and Development * Business Plan Evaluation Valuing Project Achieve * Management Buyout Seagate Technology Buyout * Merger and Acquisition Friendly Cards, Inc.Pinkerton (A) Vodaphone Airtouch's Bid for Mannesmann * Index of Cases
Ipo - Eskimo Pie Corporation Essay
1351 WordsSep 7th, 20056 Pages
Eskimo Pie Corporation
Reynolds Metals is the majority owner of the ice scream company Eskimo Pie Corporation and has decided to sell this company. Nestle Foods provided the highest offer of $61 Million. Due to delays of the Nestlé's purchase, Reynolds Metals has take into consideration the IPO proposal of David Clark, president of Eskimo Pie Corporation, rather than selling the company to Nestle Foods (Case Study, 2001). This analysis will identify the current value of the company at a stand-alone value and explain why Nestle Food would want to buy this company and the synergies involved for their reasoning. We will also discuss who will benefit if Reynolds Metals were to sell to Nestle or were to create an IPO.…show more content…
The greatest risk using Discounted Cash Flow Method is all the assumptions that were made. Without knowing and having complete information this method could report underestimated or overstatement figures.
The second method we used to analyze the firm's value was the Comparable Companies Method. As shown in Table 1, we used the historical figures as of 1990 and Goldmans Sach's Projections. With an average of 22.8 times the value, Eskimo Pie has a value of $57 million at the fiscal year end of 1990. The Comparable Companies Method is more accurate then the Discounted Cash Flow Method because assumptions are not being used and the company's value is compared to industry values. The risk of using this method is that the value is subject to short-term fluctuations and assumes all companies can generate the same growth.
Other methods not considered are the Book Value Method and Economic Method. Book Value Method does not take in to consideration the market value of the company. Eskimo Pie true value is based on the name of the product and not the historical value of assets. Eskimo Pie generates high cash and does not need to invest in fixed assets to create growth.
Nestle Foods The purpose of Nestlé's proposal of $61 Million is to consolidate its current operation Drumstick with Eskimo Pie operations. Buying Eskimo Pie will lower overhead cost by eliminating Eskimo Pie management, utilizing existing facilities,