CASE 1

Hybrid Rice Corporation is a manufacturing company that produced rice and other agricultural products, this
corporation is under the industrial sector. The directors of the company wants to improve their production by
modernizing their plant and machinery, so the corporation is on need of fund that will mature beyond one year. To
weigh which approach will be better, to approach directly the stock exchange or to approach first the consultant, the
advantages and disadvantages of the approaches should be considered.

CASE 2

Specialty Paper Corporation is a large and creditworthy company operating in a Philippine Valley. It is an export-
oriented unit, dealing in exclusive embroidered paper.

PROBLEM:
1.The firm is unable to get an uninterrupted supply of raw materials.
2. The duration of production cycle has also increased.
3. The supplier of raw materials ask the company for advance payment.
4. The company is facing a liquidity crisis.

QUESTIONS:
A. As a finance manager of the company, name and explain the alternative to bank borrowing that
the company can use to resolve the crisis.
B. Would you consider Commercial Paper as one of your alternatives? Why?

CASE 3

The corporation requires funds for its inventory, payment of salaries and wages, payment of utilities, and
other monthly operating expenses.

PROBLEM:
The company is experiencing a liquidity crisis.

CASE 4

Incorporated in 2000, Dairy Corporation is one of the leading manufacturers and marketers of dairy-based
branded foods in India. In the initial years, its operation was restricted only to collection and distribution of milk. But,
over the years it has gained a reasonable market share by offering a diverse range of cheese, ghee, milk powders, etc.
In order to raise capital to finance its expansion plans. Dairy Corporation has decided to approach capital market
through a mix of Offer for sale and a public issue of shares.
A. Name and explain the types of financial market being approached by the company.
B. Identify the possible financial instruments to be raised for this.

CASE 5
BACKGROUND
Juana Dela Cruz’ grandmother who was unwell, called her and gave her a gift packet. Juana opened the packet and
saw many crumpled share certificates inside. Her grandmother told her that they had been left behind by her late
grandfather. As no trading is now done in physical form, Juana wants to know the process by adopting which she is
in a position to deal with these certificates.

A. Identify and state the process mentioned above.

B. Give at least two reasons why dealing with shares in physical form had been stopped.
CASE 6
Gabriel won a cash prize of Php 20,000 in the National level Robotics Competition. On the advice of his
father, he visits a nearby bank to open a Fixed deposit account in his name with the prize money. His sister Heart
accompanied him to the bank. On reaching the bank, he notices big banners which are placed within the premises
containing information about the various arrangements through which corporates may raise their capital through the
bank. Being a finance graduate, Heart explains to Gabriel that banks play the role of the financial intermediary by
helping in the process of channelizing the savings of the households into the most profitable business ventures.

Aside from the bank, suggest other financial intermediaries that help in the process of channelizing the
savings of the households into the most productive to use.

CASE 7

Michael works as a waiter in a five-star hotel in Philippines. While serving the customer he overhears him at
the table saying that he has made profits higher than expected by investing in securities market. So, Michael also
decides to make a nominal investment from his savings in the stock market in pursuit of higher gains.

Question 1:
A. As a financial consultant, discuss with him the steps involved in investing in the securities market.

Question 2:

B. Discuss also with him, other alternatives where he can invest his savings, the process and which financial
intermediaries they can go to.

CASE 8

Pedro finalizes a deal to buy a new house. So, he visits a nearby branch of a commercial bank and withdraw from
his account in order to pay the token money to the seller. A large number of customers are present to make cash
withdrawals.

PROBLEM:

The bank is likely to fall short of cash for that day.