Southwest Airlines: Hedging and Shareholder Value
Michael R. Ingrassia
Georgetown University Law Center
University of San Diego School of Law
August 30, 2006
U of Colorado Law Legal Studies Research Paper No. 06-29
This teaching case describes the hedging program of Southwest Airlines and asks students to consider whether the purchase of additional (now more costly) fuel hedging contracts makes sense. The case prepares students to consider arguments for and against hedging. The case also explores the legal implications of hedging and its relationship to shareholder vs. stakeholder theory, and it asks students to consider in what circumstances hedging against unsystematic risk is a proper exercise of fiduciary duty.
Number of Pages in PDF File: 25
Keywords: hedging, Southwest, airlines, fiduciary duty, shareholder value
Date posted: September 4, 2006
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