《《21 Cox Communications》.pdf

t 5-201-116 R E V : F E B R U A R Y 2 7 , 2 0 0 4 s o TEACHING NOTE P Cox Communications, Inc., 1999 r Objectives This case introduces students to the questions of (1) how to make short-term and long-term o funding decisions, (2) how new/innovative financial products create value by allowing firms to accomplish business objectives (in this case, meeting a firm’s funding requirements), and (3) how to go about analyzing the use of financial products with embedded options. The case also illustrates how various constraints, both typical (tax shields, costs of financial distress, financial flexibility) and y atypical (the financial wishes of a majority shareholder), can influence a firm’s financing decisions as well as how innovative financial instruments can be used to alleviate these financing constraints and