Capital Structure and Firm Value 

This note explores the interaction between the use of debt and the value of the company and a brief look at the use of debt. It also introduces the concept of financial and operating leverage. In addition, it covers the impact of the use of debt in the presence of no taxes, corporate taxes only, […]

State of Connecticut Municipal Swap 

Connecticut wants to raise $ 325 million of long-term fixed-rate debt. One option is to make it synthetically – issue long-term variable rate debt and enter into interest rate swaps. The fact is, a means to analyze the various floating rate structures and different types of swaps. Also raises issues related to the risk of […]

Pressco Inc.–1985 

Capital budgeting problem is considered from the context of dealer trying to make a sale of energy-efficient heavy industrial equipment. Changes in tax law promises a significant impact on the decision making process of the customer. Teaching aim: to surround solution of capital budgeting difficulties often encountered in the real decision-making. These include taxes, inflation […]

Lockheed Aeromod Center Inc. 

Wholly owned subsidiary of Lockheed Corporation has a $ 11 million expansion underway in South Carolina. The company must decide how best to take this opportunity to issue tax exempt debt. In particular, the solution includes a choice as to repayment and redemption structure is proposed. Designed to enable students to isolate the tax shields […]

Carried Interest 

Makes the point that the general partners, and other part of the contract for a share of the profits of any company that they managed to generate. This practice raises the question whether the value of the contract rights should be taxed when it is received or only when profits ultimately earned. Raises questions about […]