Eagle Finance Corp (B)

12 Pages Posted: 21 Oct 2008

See all articles by Susan Chaplinsky

Susan Chaplinsky

University of Virginia - Darden School of Business

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Abstract

This case and its companion (UVA-F-1095) provide comprehensive coverage of a firm's decision to undertake an initial public offering (IPO). The company is a nonregulated financial firm in a rapidly growing area of consumer finance (high credit-risk automobile loans). The A case follows the firm from its first meeting with investment bankers to the determination of a preliminary IPO price range. In the B case, the firm's "road show" encounters a "cold-issue" market, and Eagle is unable to sell its shares at a price near the preliminary file range. Management is confronted with the tough choice of whether to proceed with the IPO or cancel it. The cases provide a rich opportunity to compare management's internal valuation of the firm (derived from market multiples and discounted-cash-flow analysis) with the market's assessment of value. Excel spreadsheet files are available for use with this case and its teaching note (UVA-S-F-1102).

Keywords: security issuance, equity valuation, initial public offering

Suggested Citation

Chaplinsky, Susan J., Eagle Finance Corp (B). UVA-F-1102, Available at SSRN: https://ssrn.com/abstract=909370 or http://dx.doi.org/10.2139/ssrn.909370

Susan J. Chaplinsky (Contact Author)

University of Virginia - Darden School of Business ( email )

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Charlottesville, VA 22906-6550
United States
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434-243-7676 (Fax)

HOME PAGE: http://www.darden.virginia.edu/faculty/chaplinsky.htm

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