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Case
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Reference no. 290-015-1
Authors: Alex Rebmann (Middlesex University)
Published in: 1990

Abstract

The case concerns a U.S.M. listed PLC which is considering a possible investment in a major new facility to produce blow-molded PET bottles for the food industry. It is also concerned with the financing of this facility. The teaching objectives of this case are: (1) A critical examination of the process of investment appraisal in the firm and the use of financial theory to decide whether the facility should be acquired. (2) Deciding on a relevant discount rate for the above. (3) An evaluation of the management''s view that both a rights issue and a share placing dilute shareholders'' equity. (4) Deciding on an appropriate financing of the investment.
Location:
Industry:
Size:
Small
Other setting(s):
1989

About

Abstract

The case concerns a U.S.M. listed PLC which is considering a possible investment in a major new facility to produce blow-molded PET bottles for the food industry. It is also concerned with the financing of this facility. The teaching objectives of this case are: (1) A critical examination of the process of investment appraisal in the firm and the use of financial theory to decide whether the facility should be acquired. (2) Deciding on a relevant discount rate for the above. (3) An evaluation of the management''s view that both a rights issue and a share placing dilute shareholders'' equity. (4) Deciding on an appropriate financing of the investment.

Settings

Location:
Industry:
Size:
Small
Other setting(s):
1989

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