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Abridged version
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Reference no. UVA-F-0812
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia); Stephanie M Summers (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 1989
Version: 05.1993
Length: 20 pages
Data source: Field research
Topics: Bonds; Capital structure; Debt policy; Financial policy; Liability management; Option pricing
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Abstract

The chief financial officer of this diversified baking company must decide whether to issue convertible debt rather than straight debt or equity. In evaluating the proposed terms of the convertibles offering, the student must value the securities by valuing the call option (using option-pricing theory) and the bond component. This case is used to introduce the topic of convertible securities.
Location:
Thomasville, GA
Industry:
Baking
Size:
USD603 million in sales
Other setting(s):
1985
Teaching note
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Reference no. UVA-F-0812TN
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 1989
Version: July 1993
Length: 19 pages
View full details

About

Abstract

The chief financial officer of this diversified baking company must decide whether to issue convertible debt rather than straight debt or equity. In evaluating the proposed terms of the convertibles offering, the student must value the securities by valuing the call option (using option-pricing theory) and the bond component. This case is used to introduce the topic of convertible securities.

Settings

Location:
Thomasville, GA
Industry:
Baking
Size:
USD603 million in sales
Other setting(s):
1985

Related

Teaching note
-
Reference no. UVA-F-0812TN
Subject category: Finance, Accounting and Control
Authors: Bob Bruner (Darden School of Business, University of Virginia)
Published by: Darden Business Publishing
Originally published in: 1989
Version: July 1993
Length: 19 pages
View full details