The Whistling Bird Winery has experienced above-industry-average growth in new revenues over the past five years. Although operating with a heavy debt position, the firm, owned and managed by Laurie Johnson, has developed award winning premium table wines that have been enthusiastically accepted by consumers in the northeastern United States. The firm currently has expansion plans that include grape growing land, expanding capacity at its winery, and increasing its fledgling retail operations. Laurie has quickly realized that private equity funding is her only viable option and is evaluating her position at the winery, from both an owner and a manager perspective. With the cost of equity capital quite expensive, is her current expansion proposal worthwhile?
Gilinsky, Armand and Lopez, Raymond H., "Whistling Bird Winery" (2005). Case Studies. Paper 7.