More search options
Basket icon
No items
Basket icon

Product details

By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.
Prize winner
Case
-
Reference no. 9-292-140
Subject category: Finance, Accounting and Control
Authors: Timothy A Luehrman (Harvard Business School); William A Teichner (Harvard Business School)
Published by: Harvard Business Publishing
Originally published in: 1992
Version: 12 June 1992
Revision date: 12-Feb-2018
Length: 19 pages
Data source: Field research
Topics: Decision trees; Managing uncertainty; Capital budgeting; Option pricing; Real options; Securities analysis; Copyright; Cash flow; Financial instruments; Valuation; Debts; Contracts; Securities
Share a link: https://casecent.re/p/46273
| No reviews for this item
View our pricing guide or login to see prices.

Abstract

A group of investors is considering buying the sequel rights for a portfolio of feature films. They need to determine how much to offer to pay and how to structure a contract with one or more major US film studios. The case contains cash flow estimates for all major films released in the United States during 1989. These data are used to generate estimates of the value of sequel rights prior to the first film's release. Designed to introduce students to real options and techniques for valuing them. It clearly illustrates the power of option pricing techniques for certain types of capital budgeting problems. Also illustrates the practical limitations of such techniques.

Time period

The events covered by this case took place in 1992.

Geographical setting

Region:
Americas
Country:
United States
Location:
California

Featured company

Arundel
Turnover:
USD USD2.1 billion revenues
Industry:
Film
Teaching note
-
Reference no. 5-295-118
Subject category: Finance, Accounting and Control
Authors: Timothy A Luehrman (Harvard Business School)
Published by: Harvard Business Publishing
Published in: 1995
Length: 14 pages
View full details
Case
-
Reference no. 9-202-S01
Spanish language
Subject category: Finance, Accounting and Control
Authors: Timothy A Luehrman (Harvard Business School); William A Teichner (Harvard Business School)
Published by: Harvard Business Publishing
Originally published in: 1992
Version: 12 June 1992
Length: 21 pages
Data source: Field research
Topics: Decision trees; Managing uncertainty; Capital budgeting; Option pricing; Real options; Securities analysis; Copyright; Cash flow; Financial instruments; Valuation; Debts; Contracts; Securities
View full details
Software
-
Reference no. XLS078
Subject category: Finance, Accounting and Control
Authors: William A Teichner (Harvard Business School); Timothy A Luehrman (Harvard Business School)
Published by: Harvard Business Publishing
Published in: 1992
Format: .xls
Data source: Field research
Topics: Decision trees; Managing uncertainty; Capital budgeting; Option pricing; Real options; Securities analysis
View full details

About

Abstract

A group of investors is considering buying the sequel rights for a portfolio of feature films. They need to determine how much to offer to pay and how to structure a contract with one or more major US film studios. The case contains cash flow estimates for all major films released in the United States during 1989. These data are used to generate estimates of the value of sequel rights prior to the first film's release. Designed to introduce students to real options and techniques for valuing them. It clearly illustrates the power of option pricing techniques for certain types of capital budgeting problems. Also illustrates the practical limitations of such techniques.

Settings

Time period

The events covered by this case took place in 1992.

Geographical setting

Region:
Americas
Country:
United States
Location:
California

Featured company

Arundel
Turnover:
USD USD2.1 billion revenues
Industry:
Film

Related

Teaching note
-
Reference no. 5-295-118
Subject category: Finance, Accounting and Control
Authors: Timothy A Luehrman (Harvard Business School)
Published by: Harvard Business Publishing
Published in: 1995
Length: 14 pages
View full details
Case
-
Reference no. 9-202-S01
Spanish language
Subject category: Finance, Accounting and Control
Authors: Timothy A Luehrman (Harvard Business School); William A Teichner (Harvard Business School)
Published by: Harvard Business Publishing
Originally published in: 1992
Version: 12 June 1992
Length: 21 pages
Data source: Field research
Topics: Decision trees; Managing uncertainty; Capital budgeting; Option pricing; Real options; Securities analysis; Copyright; Cash flow; Financial instruments; Valuation; Debts; Contracts; Securities
View full details
Software
-
Reference no. XLS078
Subject category: Finance, Accounting and Control
Authors: William A Teichner (Harvard Business School); Timothy A Luehrman (Harvard Business School)
Published by: Harvard Business Publishing
Published in: 1992
Format: .xls
Data source: Field research
Topics: Decision trees; Managing uncertainty; Capital budgeting; Option pricing; Real options; Securities analysis
View full details
Awards, prizes & competitions
The Case Centre classic case - Finance, Accounting and Control