Since the business's inception ten years previously, the company hadn't paid total dividends to shareholders.
The president was anxious to provide some return for the investments made, but he was convinced that he could optimize stockholder return if he could position the firm to benefit from the tremendous business growth. He also wonders how much capital he will want, and where to obtain it.
Learning Objective: This is an extensive case that combines valuation of a business entity, strategies for managing the culture of a business in the face of change, and financing growth.
Through this case, students would be able to see things from the perspective of a veteran supervisor, whose modest company is poised for considerable increase in a very dynamic environment.
Students will confront the following problems in this case: the ethical, but not legal, obligation to compensate preferred shareholders; preservation of corporate culture as a legitimate business concern; retirement of short-term loans that are callable; debt policy or capital structure; financing strategy to match expected increase; and valuation.
Publication Date: 10/30/1995
This is just an excerpt. This case is about Finance
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Piedmont University
David Berman
Transatlantic Holdings, Inc. – The Belle of the Ball
