Publications

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2019
Chapter

Interorganizational Collaboration and Start-Up Innovation

By: Vikas A. Aggarwal and Andy Wu

This chapter presents an overview of the literature on collaborative relationships between start-ups and incumbent firms, focusing on the implications of these relationships for start-up innovation and performance. Value creation in such relationships occurs when... View Details

Keywords: Alliance; Corporate Venture Capital; Complementary Assets; Appropriability; Business Startups; Joint Ventures; Knowledge; Innovation and Invention; Value Creation; Entrepreneurship

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September 2010
Case

New Heritage Doll Company

By: Timothy A. Luehrman and Heide Abelli

A manufacturer and retailer of specialty doll products must decide which of two projects to fund. The decision requires the student to compute cash flows for the 2 projects, discount values to the present and compare and contrast different project performance measures. View Details

Keywords: Forecasting; Resource Management; Resource Allocation; Forecasting and Prediction; Capital Budgeting; Manufacturing Industry; Consumer Products Industry; Retail Industry

March 1982 (Revised June 1986)
Background Note

Note on Diversification as a Strategy

By: Michael E. Porter and Malcolm S. Salter

Presents a discussion of corporate diversification. Covers historical background, the concept of strategy for a diversified company, and concepts of value creation. View Details

Keywords: Diversification; Strategy; Value Creation

2010
Case

New Heritage Doll Company: Capital Budgeting: Brief Case No. 4212.

By: Timothy A. Luehrman and Heide Diener Abelli

A manufacturer and retailer of specialty doll products must decide which of two projects to fund. The decision requires the student to compute cash flows for the 2 projects, discount values to the present and compare and contrast different project performance measures. View Details

Keywords: Capital Budgeting; Projects; Decision Making; Cash Flow; Performance Evaluation; Production

June 2002
Background Note

Note on the Equivalency of Methods for Discounting Cash Flows

By: William E. Fruhan Jr.

Uses a numerical example to demonstrate that when you discount the cash flows to capital from a project at the weighted average cost of capital, you get same net present value result as you obtain when discounting the cash flows to equity at the cost of equity. Also... View Details

Keywords: Capital Structure; Cash Flow; Cost of Capital; Equity; Valuation

11 May 2015
Working Paper Summaries

What Do Private Equity Firms Say They Do?

Keywords: by Paul A. Gompers, Steven N. Kaplan & Vladimir Mukharlyamov; Financial Services

June 2001 (Revised October 2003)
Case

Sampa Video, Inc.

A video rental store is considering offering home delivery service. Management must value the project under different financing strategies and methods, specifically adjusted present value (APV) and weighted average cost of capital (WACC). View Details

Keywords: Expansion; Cost of Capital; Entertainment; Decision Choices and Conditions; Financial Strategy; Motion Pictures and Video Industry; Entertainment and Recreation Industry

June 1998 (Revised June 1999)
Case

Dixon Corporation: The Collinsville Plant

By: W. Carl Kester

Dixon Corp.faces the task of valuing a plant and an associated project that it is considering buying. The revisions are designed to enable the application of adjusted present value technique for valuation. A rewritten version of an earlier case. View Details

Keywords: Factories, Labs, and Plants; Valuation; Projects; Forecasting and Prediction; Acquisition; Entertainment and Recreation Industry; Technology Industry

November 1994 (Revised January 1995)
Background Note

A Note on Capital Cash Flow Valuation

By: Richard S. Ruback

Presents the capital cash flow method for valuing risky cash flows. In this method cash flows are calculated to include the benefits of interest tax shields. In a capital structure, with just ordinary debt and common equity, capital cash flows equal the flows available... View Details

Keywords: Capital; Cash Flow; Valuation

December 2014
Technical Note

The Thermostat Industry: Transformation from Analog to Digital

By: Karim R. Lakhani, Kerry Herman and Christine Snively

This note examines the evolution of the thermostat industry as it transitioned from analog to digital technologies. It presents an overview of key industry participants and the shift in value creation and value capture models for firms. View Details

Keywords: Digital; Digital Convergence; Business Models; Digital Transition; Technology Change; Technology Strategy; Information Technology; Digital Transformation; United States

September 1986 (Revised August 1987)
Case

Pressco, Inc.--1984

By: William E. Fruhan Jr.

A marketing representative of heavy industrial equipment needs to evaluate the net present value of his equipment from the perspective of the buyer under changing tax regulations. View Details

Keywords: Machinery and Machining; Valuation; Product Positioning; Performance Evaluation; Taxation; Price; United States

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December 1999 (Revised November 2003)
Background Note

Pricing: A Value-Based Approach

By: Robert J. Dolan

Presents a framework for determining prices for products and services in concert with the value provided to customers. Discusses methodologies for estimating customer value. View Details

Keywords: Price; Customers

December 2018
Article

Some Elements of Peronist Beliefs and Tastes

By: Rafael Di Tella and Juan Dubra

We study the beliefs and values of Peronism. Instead of a comprehensive approach, we focus on three elements. First, we study beliefs and values about the economic system present in Peron’s speeches during the period 1943–1955. Second, given that these beliefs are... View Details

Keywords: Populism; Altruism; Exploitation; Economic Systems; Values and Beliefs; Argentina

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2022
Book

Private Equity

By: Paul A. Gompers and Steven N. Kaplan

This Advanced Introduction provides an illustrative guide to private equity, integrating insights from academic research with examples to derive practical recommendations. Paul Gompers and Steven Kaplan begin by reviewing the history of private equity then exploring... View Details

Keywords: Private Equity; Investment Funds; Value Creation

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June 2005 (Revised November 2006)
Background Note

Valuation Methods and Discount Rate Issues: A Comprehensive Example

By: Marc L. Bertoneche and Fausto Federicic

Presents a comprehensive review of the valuation methods based on discounting cash flows or value creation metrics and shows, through simple example and a straightforward "how-to-do" framework, the perfect consistency and identity of their results under similar... View Details

Keywords: Valuation

June 2002 (Revised March 2011)
Supplement

Discount & Hawkins Openings: Highlights of the Transcript

By: Michael A. Wheeler

This case presents a transcript of a video that illustrates two possible ways that two professional negotiators might perform in a negotiation simulation. It ighlights two possible "openings" of the negotiation, displaying possible ways value might be created and/or... View Details

Keywords: Value Creation; Negotiation Tactics

January 1993 (Revised May 2004)
Case

Laurinburg Precision Engineering

By: William J. Bruns Jr.

A small manufacturer needs additional financing for expansion and production improvements. A bond issue would provide needed funds, and a zero-coupon bond would delay payments until funds provided by operations were available. Present value tables are included. View Details

Keywords: Valuation; Bonds; Financing and Loans; Interest Rates; Manufacturing Industry