Fin 4413

1963 Words8 Pages
Finance 725 Spring 2006
J. E. Hodder

Corporation Finance

Course Schedule

Tuesday, January 17: Introduction

Thursday, January 19: Clarkson Lumber Company Reading: Note on Financial Analysis

a. How is the company 's financial performance? (Examine appropriate financial ratios.) b. Why has Clarkson Lumber borrowed increasing amounts despite its consistent profitability? c. How has Mr. Clarkson met the financing needs of the company during the period 1993 through 1995? Has the financial strength of Clarkson Lumber improved or deteriorated? d. How attractive is it to take trade discounts?

Tuesday, January 24: Clarkson Lumber Company
…show more content…
c. Estimate the incremental effect on UST’s value if the entire $1 billion recapitalization is implemented immediately (January 1, 1999). Assume a 38% tax rate and perpetual debt. Also analyze, via a pro forma income statement, whether UST will be able to make interest payments. d. Would UST be better off with a different initial debt level? Should it adjust the debt level through time? e. Will the recapitalization hamper UST’s ability to maintain its long history of dividend payments?

Thursday, February 16: No Class Meeting

A “make-up” session is tentatively scheduled for 7:00 PM on Thursday February 2nd. The topic will be a brief review of Capital Structure Theory.

Tuesday, February 21: Stone Container Corporation (A)

a. Compare Roger Stone’s growth and financial strategies with those of his predecessors. b. Examine the sensitivity of Stone Container’s earnings and cash flow to the paper and linerboard pricing cycle. Assume sales volume of 7.5 million tons per year and a 35% marginal tax rate. What would be the effect of a $50 per ton price increase? Is such an industry-wide price increase plausible? c. What should be Stone Container’s financial priorities in 1993? d. Of the financing alternatives described in the case, which would be in the best interests of Stone’s shareholders? Which would be in the
Get Access