American trucking company is considering the use of debt for the first time to acquire another company. Directors of the company are divided in their view of the likely impact of leverage on the performance of the Continental Carriers. Their differences must be reconciled and the decision made on how to issue new debt or equity to finance the acquisition. Students are introduced to the impact of leverage on performance variables such as income, growth, earnings per share and stock price. Rewritten version of the previous case. "Hide
on W. Carl Kester Source: Harvard Business School 5 pages. Publication Date: June 25, 1991. Prod. #: 291080-PDF-ENG
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