Publications

April 1994 (Revised September 1994)
Case

KENETECH Corporation

By: William E. Fruhan Jr.

Involves a strategic decision about how fast to ramp up sales. Improvements in technology have driven down the cost of electric power generated from wind turbines to the point where they are competitive with fossil-fuel plants. KENETECH needs to raise equity capital to... View Details

Keywords: Renewable Energy; Borrowing and Debt; Equity; Initial Public Offering; Growth and Development Strategy; Market Entry and Exit; Going Public; Sales; Competition; Energy Industry

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25 Mar 1994
Lecture

Canada's Cost of Capital Disadvantage?: Comparative Perspectives

By: W. Carl Kester

Keywords: Capital; Canada

1994
Other Unpublished Work

Interest Allocation Rules and the Changing Cost of Debt Finance

By: K. A. Froot and J. Hines

Keywords: Corporation Taxation; Interest Deductibility; Cost of Capital; Taxation; Interest Rates; Borrowing and Debt; Corporate Finance

1994
Other Unpublished Work

Losing Interest: Interest Allocation Rules and the Cost of Debt Finance

By: K. A. Froot and J. Hines

Keywords: Accounting; Corporation Taxation; Interest Deductibility; Cost Of Capital; Corporate Finance; Borrowing and Debt; Financing and Loans; Interest Rates

December 1993
Article

Risk Management: Coordinating Corporate Investment and Financing Policies

By: K. A. Froot, David S. Scharfstein and J. Stein

Keywords: Catastrophe Risk; Corporate Finance; Banking And Insurance; Hedging; Banking; Decision Choice And Uncertainty; Financial Markets; Insurance; Policy; Risk Management; Natural Disasters; Cost of Capital; Asset Pricing; Insurance Industry

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November 1993 (Revised April 2007)
Case

Continental Airlines--1992 (Abridged)

By: Stuart C. Gilson

The CEO is preparing a recommendation to the board regarding several potential outside investments in the company, which is currently operating in bankruptcy. In making his decision, the CEO has to consider various financial and strategic factors, including possible... View Details

Keywords: Capital Structure; Cash Flow; Cost of Capital; Insolvency and Bankruptcy; Investment; Taxation; Risk and Uncertainty; Valuation; Aerospace Industry; United States

June 1993 (Revised March 1995)
Case

La Nacional and the Huites Dam Project

By: Kenneth A. Froot

Keywords: Emerging Market Finance; Cost of Capital; Infrastructure; Investment; Mexico

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summer 1992
Article

Cross-country Differences in the Cost of Capital: A Survey and Evaluation of Recent Empirical Studies

By: W. C. Kester and T. A. Luehrman

Keywords: Cost; Capital

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May 1992 (Revised January 2000)
Case

Asea Brown Boveri: The ABACUS System

By: Robert L. Simons

Describes the computer-based information system (ABACUS) used to monitor and control business operations in a complex, global company. Describes the technical attributes of the database system, financial reporting requirements, target setting and profit calculations on... View Details

Keywords: Financial Reporting; Profit; Business Growth and Maturation; Analytics and Data Science; Design; Accounting Audits; Growth and Development; Globalized Firms and Management; Complexity; Technology Industry

11 May 1992 - 13 May 1992
Lecture

Have Japanese Corporations Made Good Use of Their Low Cost of Capital?

By: W. Carl Kester

Keywords: Capital; Cost of Capital; Japan

February 1992 (Revised March 1993)
Case

Intel Corp.--1992

By: Kenneth A. Froot

Intel Corp., the world's dominant designer and manufacturer of microprocessors (the "brains" of the personal computer), has accumulated a large amount of cash (net of debt). Furthermore, it expects to continue to accumulate cash at an unprecedented rate. Has the... View Details

Keywords: Dividends; Financial Management; Competition; Multinational Firms and Management; Cash; Technological Innovation; Capital Structure; Investment Return; Equity; Financial Strategy; Corporate Finance; Semiconductor Industry; United States

February 1992 (Revised April 1993)
Case

Acid Rain: The Southern Co. (A)

By: Forest L. Reinhardt

The Southern Co., an electric utility, is planning its compliance with the 1990 amendments to the Clean Air Act. The Act established a system of tradeable permits for sulfur dioxide emissions. The company must decide whether to install pollution control equipment and... View Details

Keywords: Energy Generation; Business Strategy; Environmental Sustainability; Cost vs Benefits; Financial Management; Strategic Planning; Investment Return; Government Legislation; Wastes and Waste Processing; Utilities Industry; Energy Industry; United States

January 1992
Teaching Note

Communications Satellite Corporation TN

By: William E. Fruhan Jr.

Teaching Note for (9-276-195). View Details

Keywords: Cost of Capital; Equity; Risk and Uncertainty; Communications Industry

January 1992
Teaching Note

Pioneer Petroleum Corporation TN

By: Thomas R. Piper

Teaching Note for (9-292-011). View Details

Keywords: Cost of Capital; Production; Transportation; Equity; Measurement and Metrics; Energy Industry

November 1991 (Revised December 1996)
Case

Pressco, Inc.--1985

By: William E. Fruhan Jr.

A capital budgeting problem is viewed from the context of a marketing representative attempting to make a sale of energy saving heavy industrial equipment. Tax law changes promise to have a significant impact on the customer's decision process. Teaching purpose: To... View Details

Keywords: Capital Budgeting; Machinery and Machining; Valuation; Taxation; Customer Value and Value Chain; Cost vs Benefits; Inflation and Deflation; Cost Management; Product Marketing; North and Central America

July 1991
Case

Pioneer Petroleum Corp.

By: Richard S. Ruback

Pioneer is an integrated oil company. Its operations include exploration and development, production, transportation, and marketing. The case focuses on Pioneer's cost of capital calculations and its choice between a single company-wide cost of capital or divisional... View Details

Keywords: Cost of Capital; Energy Industry; Mining Industry

February 1991
Case

Burlington Northern: The ARES Decision (B)

By: Julie H. Hertenstein and Robert S. Kaplan

The ARES team formally proposes that Burlington Northern implement the ARES system. The project meets resistance. In light of financial restructuring and high level of debt, executives wonder whether the company can afford ARES. Weak links during the ARES development... View Details

Keywords: Accounting Audits; Restructuring; Cost vs Benefits; Decision Choices and Conditions; Borrowing and Debt; Capital Budgeting; Projects; Technology Adoption; Service Industry

February 1991 (Revised October 1991)
Case

Fenchel Lampshade Co.

By: William A. Sahlman

Describes the proposed purchase of a lampshade manufacturer by Steven and Michele Rogers, recent graduates of the Harvard Business School. Focuses on their plans to raise the capital necessary to buy the company. Among the issues raised are how to structure the deal... View Details

Keywords: Venture Capital; Financing and Loans; Negotiation Deal; Business or Company Management; Cost vs Benefits; Manufacturing Industry

1990
Other Unpublished Work

The High Price of Land and the Low Cost of Capital: Theory and Evidence from Japan

By: David S. Scharfstein, Anil Kashyap and David Weil

Keywords: Cost of Capital; Japan