This case fits into courses on macroeconomics, international finance, and capital markets. It raises the issue of privatization of the social-security system and its impact on the economy and local capital market.

Corning, Inc., is faced with a decision about what to do with one of its three business segments, Consumer Products, which has been performing below senior management's expectations. The case puts the student in the role of Marty Gibson, president of the Consumer Segment, who is provided with a variety of concerning potential solutions. The case can be used to discuss (1) industry structure, (2) core competence and its role in strategy and organization, and (3) organizational flexiblility in contrast with mass production paradigms.

This case describes the situation facing the new president of Mexico in December 1982: internal and external economic problems have crippled the country. The student is given the opportunity to analyze the problem, its sources, and development, and to recommend economic and political solutions that will enable Mexico to restore its economy. The conflicting desires of international creditors and domestic political/social groups provide a framework in which external balance and internal balance are difficult to achieve simultaneously.

This case looks at the alternatives P&G is evaluating to finance the growth of its Mexican subsidiary. The choices have different tax implications and risk profiles, which will be influenced by economic performance and currency movements.

The investment officer of a university endowment is considering the endowment's first investment in hedge funds. He has a range of choices but as he examines the objectives and performance of several funds, he finds striking differences among them. The issue of what a hedge fund is becomes less clear as well as the criteria that the university should use in making its decision. Gissendanner must make a recommendation to his board including the reasons for his choice.

This case provides an opportunity to exercise valuation skills and explore investment analysis. Students are exposed to the notion of enterprise value and the possibility of capital-structure arbitrage. See also the A case (UVA-F-1434).

The Travelers, a major insurance company, is considering investing in international bonds. Ann Melissa Dowling has recently been hired by the company to research the possibilities and direct the investment efforts. The case explores the possible motives for adding nondollar bonds to a portfolio and considers the risk/return tradeoffs involved in investing in these instruments. Excerpt UVA-F-0751 THE TRAVELERS CORPORATION Anne Melissa Dowling glanced out the window of her 10th floor office at the morning traffic beginning on the streets below. She had arrived early to check what the foreign markets had done overnight and to review the data her analysts had gathered about expanding The Travelers' role in the international markets. Later that afternoon she would meet with her new boss, Ken Lynch, who was anxious to hear her recommendations for their upcoming presentation at the Securities Department's Investment Strategy meeting. Anne Melissa was a member of the Public Bond Department of the Travelers Insurance Company, headquartered in Hartford, Conn. She had recently been hired by The Travelers and had worked previously at The Aetna Life and Casualty Company after graduating from Columbia Business School several years earlier. Her title was Assistant Investment Officer in charge of International Investments (non‑equity), a newly created position in the department. The Travelers was interested in foreign bonds as an additional investment alternative for their portfolios, and Anne Melissa had been hired to research the possibilities and direct the investment efforts. The meeting next week would be her first major presentation to senior management. The Travelers Corporation The Travelers Corporation was one of the world's largest multi‑line insurance and health services institutions. Through its affiliated companies, it offered a wide range of products and services, including property and casualty insurance, life, accident and health insurance, health‑care delivery systems, pension and investment management services, private placement loans, financial planning, mutual funds, trust services, cash management, residential and commercial mortgages, real estate development, IRAs and Keogh plans. Financial highlights for The Travelers are shown in Exhibit 1. . . .

Trinity Development is trying to determine the best way to arrange permanent financing for a construction project. This case examines the decision to hedge that financing using financial futures. Excerpt UVA-F-0785 TRINITY DEVELOPMENT COMPANY “I thought hedging would allow me to lock in a single, protected interest rate! This analysis tells me my interest rate could be anywhere from 8.5 percent to almost 10 percent. That differential would amount to over $ 925,000 a year in interest payments on my loan amount! Can't we be more exact?” Chris Thomas was puzzled over a memorandum he had just received from Bart Meaker, Managing Director of Trinity Development's Investment Banking subsidiary in New York City. The memo outlined one alternative for managing the interest rate exposure implicit in the development of Chris' current real estate project. Chris was the regional Partner in charge of managing the construction of a 700,000 square foot building in Nashville, Tennessee. He had already obtained a floating rate loan to fund the project during the construction period. However, the construction was scheduled to be completed in 12 months, at which time a permanent loan would need to be placed. Chris anticipated that interest rates would increase during that time period and he wanted to lock in a lower rate today for his permanent long term debt. In his memorandum dated Friday, May 9, 1986, Bart had proposed a strategy of using financial futures to hedge the interest rate exposure. Chris was currently studying this possibility and wondered why it produced a range of possible costs (See Exhibit 1). How did this type of a hedge work and how was it different from other alternatives? Trinity Development Company Trinity Development was a private real estate development and investment firm that owned, leased and managed commercial properties nationwide. In 1986 the company and its partners owned and managed over 150 million square feet of space, and its assets were valued at over $ 5 billion. Since the late 1970's, when the company opened its Nashville regional office, the Partners there had developed over 5 million square feet of industrial (warehouse and office/service center), office and retail properties. Although the individual Partner was responsible for all phases of a project's development, he could also rely on the company's vast financial, marketing and administrative resources. Most of the company's financial consulting was done by its Investment Banking subsidiary in New York City. . . .

This series of cases (see also the B [UVA-BP-0372] and C [UVA-BP-0373] cases) examines Eastman Kodak's Section 301 petition against Fuji Film Company of Japan and the Japanese government, Fuji's response, and the U.S. trade representative's role in the dispute. The cases are a vehicle for discussing key aspects of U.S. trade policy, the World Trade Organization, and the nature of global competition in the photographic-film industry.

This case raises the issue of whether the United States should adopt a balanced-budget amendment. It is useful for discussions of fiscal policy, the role of government, and the budget process. Excerpt UVA-BP-0337 THE BALANCED-BUDGET AMENDMENT: PANACEA OR COP-OUT? On Thursday, June 11, 1992, the U.S. House of Representatives, after intense lobbying by Democratic leaders and an unusual coalition of interest groups, narrowly defeated a constitutional amendment that would have required the U.S. government to balance its budget. The vote effectively ended, for the time being, a movement that had been building steam over the previous year. Most lawmakers believed that the amendment would sail through Congress, propelled by the gale-force winds of anti-Washington sentiment in the country during the most unusual election year in recent memory. Proponents argued that Congress failed to balance the budget and that increased discipline was needed. Amending the Constitution, they said, was the only sure way to attain the important goal of taming the national debt. With the federal budget deficit running in the range of $ 300 billion a year and no realistic plan in place for balancing the budget, Congressman Rod Chandler (R., WA) observed that, “the American people are angry. They look on in disbelief as this institution is floundering around.” Behind the scenes, however, House Speaker Thomas Foley (D., WA) and Majority Leader Richard Gephardt (D., MO) confronted their colleagues. They argued that approval of the amendment could lead to deep cuts in Social Security—if it worked at all. Indeed, critics argued that the amendment would only add to the public's frustration. “The people are fed up, everybody knows that,” said Congressman Jack Brooks (D., TX). “But the amendment would have created only a process, not the substance of deficit reduction, and would have led to `another round of games and charades.'” . . .

Curtis Ryan, a young analyst, is asked to evaluate the stock of Warnaco. The company has a reputation as an aggressive manufacturer of lingerie, and its CEO, Linda Wachner, has been touted as one of the best and most powerful female executives in the country. In the A case (UVA-F-1440), Ryan has a lot of information to analyze and must try to determine the key issues. The B case discusses the progress of the company and its stock a couple of years later.

Olin Corporation is evaluating the financial structure for a proposed joint venture in Brazil. The head of Olin's international operations needs to recommend a financing plan as well as the project to the directors. The case is a vehicle for analyzing overseas investments, joint ventures, and the financial structure of overseas subsidiaries. Excerpt UVA-F-0874 OLIN CORPORATION Bill Schmitt, vice‑president for International Operations for Olin Corporation, was preparing a presentation concerning a project that would expand Olin's involvement in Brazil. Schmitt and his team were proposing to establish a joint venture that would be 50 percent owned by Olin's Brazilian subsidiary and 50 percent owned by a subsidiary of a leading private Brazilian company, Votorantim. The joint venture, to be called Nordesclor, would construct a calcium hypochlorite plant to produce HTH7, Olin's registered brand name for its swimming pool chemical‑treatment product. At this time, there was no HTH7 manufacturing facility in Brazil. Olin Brasil currently imported HTH7 from an Olin plant in Tennessee, had it repackaged, and sold it directly through local pool shops. Olin had begun discussions with Votorantim five years earlier, in 1983, but had decided to find out more about the Brazilian market for HTH7 before investing in a local production arrangement. A market research survey and subsequent new marketing program had dramatically increased HTH's7 market share, and Schmitt believed many benefits could be gained by moving to local production. Because this would be the first time Olin Chemicals had made a major investment in Brazil, Schmitt wanted to prepare a presentation highlighting all the advantages of this international investment and addressing any concerns the board of directors might put forth. Olin Corporation Olin Corporation was a diversified company whose business was concentrated in chemicals, metals, and applied physics, with special emphasis on electronic materials and services, aerospace/defense, and water‑quality management. Currently Olin's international operations contributed approximately 20 percent of the company's total sales. (See Exhibit 1 for financial data for 1986 and 1987.) One of Olin's goals was to double the sales and profit contributed by its international businesses by 1991. Because little growth was projected for exports, the company estimated that overseas operations and joint ventures had to grow at a 20 percent compound annual rate to meet this objective. In early 1988, International Pool Chemicals appeared to be especially promising to Olin as a growth area. Olin had been producing swimming pool chemicals for over 30 years and had always prided itself on consistently providing the highest quality products in the market. Plants in Charleston, Tennessee, and in South Africa produced its total supply of HTH7. Olin had begun exporting HTH7 to various Latin American markets, including Brazil, in the 1960s, and the Latin American region had become one of Olin's most successful in terms of profitability and market share. Olin's Brazilian segment was actually more profitable than its domestic calcium hypochlorite business on a per‑pound basis. . . .

This case is a good vehicle for analyzing how two recently merged firms should be organized to compete on a global basis. The case can be used as a stand-alone or in a module to teach students how to think about product-process change, managing core technological competencies and the merger of two firms, and global competition. See also the B case (UVA-BP-0324).

This case examines the financing options available to a U.S. multinational to provide funds for a Spanish subsidiary. The analysis is largely driven by tax considerations and the outlook for currency changes.

Students are introduced to currency options as another hedging tool (see UVA-F-0745) to manage exchange rate risk.

This case concerns the Walt Disney Company's issuance of a 100-year bond, which an investment analyst is trying to value. Duration, credit risk, and term structure are all important concepts that are used in the analysis.

This case examines the history of the telecom boom and collapse. It provides broad background on the industry in the context of proposed legislative reform. Excerpt UVA-F-1411 THE BROADBAND AND TELECOM BUBBLE Introduction The political machinations of Congress and the Administration are creating a swirl of uncertainty around the future of this industry. The Tauzin/Dingell legislation and the plethora of proceedings opened by the FCC in the past few months have investors wondering what is going on in Washington. Six years ago, Congress, the President, and the FCC jointly created the conditions to promote competition for local telephone services. Yet almost every proposal put on the table recently attempts to undermine the historic act. John Windhausen, President, Association for Local Telephone Services (ALTS) ALTS 2002 Report . . .

This series of cases (see also the A and B cases, UVA-BP-0370 and UVABP-0372) examines Eastman Kodak's section 301 petition against Fuji Film Company of Japan and the Japanese government, Fuji's response, and the U.S. trade representative's role in the dispute. The cases are a vehicle for discussing key aspects of United States trade policy, the World Trade Organization, and the nature of global competition in the photographic film industry.

This series of cases (see also the A [UVA-BP-0370] and C [UVA-BP-0373] cases) examines Eastman Kodak's Section 301 petition against Fuji Film Company of Japan and the Japanese government, Fuji's response, and the U.S. trade representative's role in the dispute. The cases are a vehicle for discussing key aspects of U.S. trade policy, the World Trade Organization, and the nature of global competition in the photographic-film industry.