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Schill, Michael J.

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A Primer on Valuing Simple Risk-Free Bonds

Options on stock indexes, currencies, and futures all have something in common: the holder of the option does not get the same thing that the holder of the underlying asset gets. This affects the value of the option. In this note, we cover the valuation implications of this for options on stock indexes, currencies, and futures. ...

American Greetings

This case, an introduction to firm valuation, examines the 2012 decision by American Greetings (AG), the greeting card company, to repurchase shares. At the time of the decision,the greeting card industry was facing an important structural shift; AG stock was trading at valuation multiples that were the lowest among its peer group. Students are invited to build a simple model of the company's futu ...

An Introduction to Technical Analysis

Technical stock analysis uses past prices and trading volume or both to predict future prices. A broad range of techniques such as chart analysis, moving averages, and other filters and oscillators can be used to identify predictable patterns in stock prices. The conventional wisdom is that stock-price patterns emerge from systematic psychological behavior of market participants. This note provide ...

Ben & Jerry's Homemade

This case examines issues of asset control for Ben & Jerry's Homemade, Inc., in light of the outstanding takeover offers by Chartwell Investments, Dreyer's Grand, Unilever, and Meadowbrook Lane Capital in January 2000. The case reviews the development of Ben & Jerry's strong social consciousness and the takeover-defense mechanisms that maintain management's control on company assets. Students, in ...

Blackhawk Urology

In early 2007, two partners in an Oklahoma medical practice must reconcile their booming urology business with declines in practice cash flow. The case highlights the difference between cash flow and accounting profits, as well as the common negative cash-flow effects of growth. It provides a straightforward introduction to simple financial-statement modeling and an opportunity to build intuition ...

Braintree Momentum Equity Fund

This case considers the viability of a momentum-oriented trading strategy in U.S. equities in 2006. The case, created for use in an investment course, provides both historical performance on the trading strategy and provides the universe of U.S. equity return data in which to execute a proposed strategy. ...

Business Valuation in Mergers and Acquisitions

This note discusses valuation in the context of business mergers and acquisitions. It builds on standard methods of business valuation to consider the unique questions arising in a merger or acquisition setting. The note focuses on valuation using the discounted cash flow (DCF) approach and the comparable-firm-multiples approach and presupposes an understanding of the principles of business valuat ...

Business Valuation: Standard Approaches and Applications

This note provides an introduction to the standard approaches used to value businesses from the perspective of the investor (e.g., discounted cash flow, market multiples). Each approach is illustrated with a specific practical application. The note provides an in-depth example of discounted cash flow valuation of a firm including cash flow forecasting, terminal value estimation, and cost of capita ...

California Pizza Kitchen

This case examines the question of financial leverage at California Pizza Kitchen (CPK) in July 2007. With a highly profitable business and an aversion to debt, CPK management is considering a debt-financed stock buyback program. The case is intended to provide an introduction to the Modigliani and Miller capital structure irrelevance propositions and the concept of debt tax shields. With the back ...

Carrefour S.A.

In August 2002, the French retail giant Carrefour S.A. was considering alternative currencies for raising (euro) EUR750 million in the Eurobond market. Carrefour's investment bankers believed that the bonds can be issued at 5.25% in euros, 5.375% in British pounds, 3.625% in Swiss francs, and 5.5% in U.S. dollars. Despite the high nominal coupon rate and the lack of any material business activity ...

Cavalier Hospital

A midsize community hospital must choose a strategy to compete with an expanding regional rival. The strategy, focused on acquiring patient volume, includes expanding investment into integrated care, setting the reimbursement structure for revenue collection, and moving to a capitation-based payment system. The case presents an evaluation of revenue models to select that which best supports a give ...

Darden Capital Management—The Monticello Fund

The investment-strategy decisions of a Darden Capital Management student-portfolio management team in 2004 are examined. Case materials allow students to estimate CAPM-based expected returns using market data. The case focuses on introducing the portfolio-allocation decision; exploring the relevance of various investment-risk metrics; developing the intuition of diversification, market risk, and t ...
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