Dougall & Gilligan Global Agency

This case concerns the long-term financing of a large advertising firm. The financing alternatives are: utilization of bank lines of credit; a private placement term loan; 20-year debentures in the public market; and common stock. The company is burdened with an overhanging convertible security issue, and faces significant business and financial risk. For the $300 million expansion program, there is a financing trade-off between increasing risk and potential return to stockholders.