Case #3 (Continental)

Case #3 (Continental) - FIN 450 Continental Carriers, Inc....

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FIN 450 Continental Carriers, Inc. Case # 3 Submitted to: Prof. Thomas J. Paup Date: October 3, 2007
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10/03/2007 Continental Carriers, Inc. The Problem In May of 1988, Continental Carriers, Inc. was considering several different methods of financing the acquisition of Midland Freight, Inc. for $50 million. Continental Carriers is a freight carrier operating mostly on the west coast and into the industrial Midwest and looking to expand it operations across the country. During a recent CCI board meeting there had been many different suggestions about the best way to finance this new endeavor and it is up to the treasurer, Elizabeth Thorpe, to assess these suggestions and help the company make the right decision. Elizabeth must decide to financing with long- term debt, preferred stock or common stock. Analysis of the Problem Preferred Stock: One director had determined that CCI could issue 500,000 shares of preferred stock at $10.50 per share and a par value of $100. This would mean that CCI would have to pay
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Case #3 (Continental) - FIN 450 Continental Carriers, Inc....

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