The vice president of finance at Rocky Mountain High Ski Resort Inc. (RMH) was analyzing the alternatives for funding a projected $25 million expansion.The popular Western Canadian all-season resort intended to add several new runs, additional snowmaking capacity, another high-speed quad chair lift, a 700-seat eatery, a new retail ski equipment shop, and upgrades to the present infrastructure. The directors of RMH were scheduled to meet in fourteen days to approve both the financing plans as well as the planned expansion.
Learning Objective: To enhance pupils' comprehension of the process a chief financial officer (CFO) goes through when making capital structure choices.
Pupils must develop decision making criteria and do a comparative analysis of the four choices. The case also provides the opportunity to review these concepts: EPS, P/E multiple, risk/return tradeoff and financial influence.
Publication Date: 08/04/1995
This is just an excerpt. This case is about Finance
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