Directions: Match Section A with Section B compete for cucumbers in the opes market. This vertical integration woeld requite 579 mil. lion in cash for the necessary farms and equipment. B. Copper Mountain Mining Company Copper Mountain Mining needs 512 miltice to finance the acquisition of mineral rights to some land in south central Mew Mecico ind is analyses designed to determine whether the mingetic acrial varvors, and oberer types of ment. If the tests are favorable, the company will need ats addith this land wamint developMountain Mining's common stock is currently sellips an additional $12 million. Copper approximately $1 per share. Other firms in the industry $11, while the company is earning Copper Mountain's debt ratio is. 30 percent, coenpared sell at from 8 io 13 times earning. Total assets at the last balance sheet date were $120 million. industry average of 35 pertent. F. Bull Gator Saloon and Dance Hall: Robert Radeliffe, a professor at the Univenity of Florida, is an avid country-and-western music fan and a square dancer. He has just learned that a recently developed downtown shopping and entertaiement ceeter still bas a lease available for the original, renovated building of the First National Bank of Gainesville. The bank outgrew the building in the late 1950s, and the large open spaces and high ceilings would be ideal for a country-and-western nighteleb. Radcliffe knows the market well and has often noted the lack of a real 'kicker bar' in Gainesville; the closest being in Starke, about 25 miles from Gainesville. Radeliffe believes that if he can obtain approsimately $50,000 for a sound system and interior decorations, he can opes a small but successful operation in the old bank building. His liquid savings total $15,000, so Radeliffe needs an additional $35,000 to open the proposed nightelub. G. Golden Gate Aircraft Corporation: Golden Gate Aircraft is a medium-sixed aircraft company located just outside San Franciseo whose sales distribution is approximately 30 perceat for defense contracts and 70 pereent for nonmilitary uses. The company has been growing steadily in recent years, and projections based on current researcb-and-development prospects call for continued growth at a rate of 5 percent to 7 percent a year. Althoagh recent reports of several brokerage firms suggest that the firm's rate of growth might be slowing down because of the high price of fuel and the softness of the business aircraft market, Golden Gate's management believes, based on internal information, that no decline is in sight. The company's stock, which is traded on the Pacific Stock. Exchange, is selling at 15 times earnings. This is slightly below the 17 times ratio of Standard \& Poor's aircraft industry average. The company has assets of $35 million and a debt ratio of 25 percent (the industry average is 23 percent). Golden Gate needs an additional $5 million over and above additions to retained earnings to support the projected level of growth.

1. Directions: Match Section A with Section B
compete for cucumbers in the opes market. This vertical integration woeld requite 579 mil. lion
in cash for the necessary farms and equipment. B. Copper Mountain Mining Company Copper
Mountain Mining needs 512 miltice to finance the acquisition of mineral rights to some land in
south central Mew Mecico ind is analyses designed to determine whether the mingetic acrial
varvors, and oberer types of ment. If the tests are favorable, the company will need ats addith this
land wamint developMountain Mining's common stock is currently sellips an additional $12
million. Copper approximately $1 per share. Other firms in the industry $11, while the company
is earning Copper Mountain's debt ratio is. 30 percent, coenpared sell at from 8 io 13 times
earning. Total assets at the last balance sheet date were $120 million. industry average of 35
pertent. F. Bull Gator Saloon and Dance Hall: Robert Radeliffe, a professor at the Univenity of
Florida, is an avid country-and-western music fan and a square dancer. He has just learned that a
recently developed downtown shopping and entertaiement ceeter still bas a lease available for
the original, renovated building of the First National Bank of Gainesville. The bank outgrew the
building in the late 1950s, and the large open spaces and high ceilings would be ideal for a
country-and-western nighteleb. Radcliffe knows the market well and has often noted the lack of
a real 'kicker bar' in Gainesville; the closest being in Starke, about 25 miles from Gainesville.
Radeliffe believes that if he can obtain approsimately $50,000 for a sound system and interior
decorations, he can opes a small but successful operation in the old bank building. His liquid
savings total $15,000, so Radeliffe needs an additional $35,000 to open the proposed nightelub.
G. Golden Gate Aircraft Corporation: Golden Gate Aircraft is a medium-sixed aircraft company
located just outside San Franciseo whose sales distribution is approximately 30 perceat for
defense contracts and 70 pereent for nonmilitary uses. The company has been growing steadily
in recent years, and projections based on current researcb-and-development prospects call for
continued growth at a rate of 5 percent to 7 percent a year. Althoagh recent reports of several
brokerage firms suggest that the firm's rate of growth might be slowing down because of the high
price of fuel and the softness of the business aircraft market, Golden Gate's management
believes, based on internal information, that no decline is in sight. The company's stock, which is
traded on the Pacific Stock. Exchange, is selling at 15 times earnings. This is slightly below the
17 times ratio of Standard & Poor's aircraft industry average. The company has assets of $35
million and a debt ratio of 25 percent (the industry average is 23 percent). Golden Gate needs an
additional $5 million over and above additions to retained earnings to support the projected level
of growth during the next 12 months. Yachts is a closely held company that was founded in 1970
by H. Schooner Yachts: Schooner Yachts is a closely heid company thas was founded in 1970

2. bercent, Russ Breaker to build a top-quality line of sailboats. The company's debt ratio is 48
percents compared to an average ratio of 36 percent for sailboat companics is general. The stock
is owned in equal parts by ten individuals, none of whom is in a position to put additional and
eamings after funds into the business. Sales for the most reeent year were $12 milion, and
eamings after $9.6 million. taxes amounted to $720,000. Total assets, as of the latest balance
sliect, were $9.6 minsion during the current fisSchooner Yachts needs an additional 54 million to
finance expansion during tie current finter in sailing in parcal year. Given the worldwide growth
in leisure-time activities and interest in sailing years ahead. ticular, the firm can anticipate
additional outside capial
4. Fiende of exlative: 8. Cuevertible dobetioss Sectioen B Alanta, Georgia is incomporated, with
each of the three Boudoir sisters owaing cene-thipd of the cutasoling stock. The company is
profitable, but rapid growth has put it under sevethe finasial serain. The real estate is all under
mortgage to an insurance company, the invertery is Neing used under a blanket chatsel mortgage
to secure a bank line of credit, and the acoods an additional 5450,000 to fisance a building and
fixtures for a new outlet. B. Timberland Power & Light: Since Timberland Power & Light, a
major electric utility, is organized as a bolding company, the Securities and Exchange
Commission must approve al of is socurities issues. Such approval is automatic if the company
stays within conventiont norms for the public utility industry. Reasonable norms call for long-
term debt in the ranget of 45 percent to 65 percent, preferred stock in the range of 0 to 15
percent, and common equily in the range of 25 percent to 45 percent. Timberland currently has
total assets of $1.5 billion financed as follows: $900 millica debe, $75 million preferred stock,
and $525 mitls.5e common equity. The company plans to raise an additional $37 million at this
time. C. Ripe and Fresh Canning Company: Ripe and Fresh Canning Company is a large
operasice located in Valdosta, Georgia, that purchases peaches and other fruits from farmers in
Geor. gia, Forida, South Carolina, Alabama, and Kentucky. These fruits are then canned and soly
on 60-day credit terms, largely to food brokers and small retail grocers in the same five-state
area. The company's plant and equipment have been financed in part by a mortgage loan, and
this is the only long-term debt. Raw materials (fruits) are purchased on terms calling foe payment
within 30 days of receipt of goods, but no discounts are offered. Because of an increase in the
popularity of vegetables and fruits, canned fruit sales have increased dramati. cally. To finance a
higher level of output to take advantage of this increased demand, Ripe and Fresh will need
approximately $550,000. D. Piper Pickle Company: Piper Pickle Company is a major packer of
pickles and pickled products (horseradish, pickled watermelon rinds, relishes, and peppers). The

3. company's stock is widely held, actively traded, and listed on the New York Stock Exchange.
Recently, it has been trading in the range of $18 to $22 a share. The latest 12 months' earnings
were $1.70 per share. The current dividend rate is 64 cents a share, and earnings, divi. dends, and
the price of the company's stock have been growing at a rate of about 7 peroent over the last few
years. Piper Pickle's debt ratio is currently 42 percent versus 25 percent for other large pickle
packers. Other firms in the industry, on the average, have been growing at a rate of about 5
percent a year, and their stocks have been selling at a pricelearnings ratio of about 10. Piper
Pickle has an opportunity to begin growing its own cucumbers, which would result in a
substantial cost savings and reduce the risk involved in having to
1. Teller Pen Corporation: Teller Pen is engaged in the manufacture of mechanical Pens pencils,
porous pens, and a recently developed line of disposable lighters. Since the sells to a great many
distributors, and its products are all considered nondurable consticher goods, sales are relatively
stable. The current price of the company's stock, which is listed on the New York Stock
Exchange, is $25. The most recent earnings and dividends per sh are $3.10 and $1.50,
respectively. The rate of growth in sales, earnings, and dividends in the past few years has
averaged 5 percent. Teller Pen has total assets of $400 million. Current liabilities, which consist
primarily of accounts payable and accruals, are $28 million; long. term debt is $83 million; and
common equity totals $289 million. An additional $33 million of external funds is required to
build and equip a new disposable-lighter manufacturing com plex in central Ohio and to supply
the new facility with working capital.