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Compact case
Case
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Reference no. 9-291-080
Authors: W Carl Kester
Published by: Harvard Business Publishing
Originally published in: 1991
Version: 25 June 1991

Abstract

A US trucking company is considering using debt for the first time to acquire another company. The directors of the company are divided in their opinion of the likely impact of leverage on Continental Carriers' performance. Their differences must be reconciled and a decision reached about whether to issue new debt or equity to fund the acquisition. Students are introduced to the impact of leverage on performance variables such as profits, growth, earnings per share, and stock price. A rewritten version of an earlier case.
Location:
Industries:
Size:
USD1 billion revenues
Other setting(s):
1988

About

Abstract

A US trucking company is considering using debt for the first time to acquire another company. The directors of the company are divided in their opinion of the likely impact of leverage on Continental Carriers' performance. Their differences must be reconciled and a decision reached about whether to issue new debt or equity to fund the acquisition. Students are introduced to the impact of leverage on performance variables such as profits, growth, earnings per share, and stock price. A rewritten version of an earlier case.

Settings

Location:
Industries:
Size:
USD1 billion revenues
Other setting(s):
1988

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