Corporate Finance · Sealed-bid capital auction

💼 How to play Capital Call

You sit on an investment committee at Rimal Holdings and bid sealed for the rights to eight projects.

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Your goal

Winning means creating the most value over three rounds: buy project rights for less than they turn out to be worth. The highest bid wins and pays what it bid, so the winner is often the one who overestimated. Disciplined bids beat brave ones.

You run one investment committee with a share of a AED 400m pool. You bid against every other committee, plus any bots, for the same lots each round.

Join in 30 seconds

Scan the QR code on the big screen with your phone camera, or open the game page and type the 4-letter code.
Type your first name. No app, no account.
Join a team or create one and name it. Your teammates get a role each. In individual mode you run your own investment committee.
If your phone locks or the page reloads, open it again: you return to the same seat.

Team roles

Lead: Chairs the team and submits the final decision. If the Lead's phone dies, any teammate can take over. In this game: Agree a maximum bid for each lot before anyone mentions numbers out loud.
Analyst: Owns the numbers and the team's prediction for the round. In this game: Discount every cash flow at your WACC; riskier projects deserve a higher rate.
Treasurer: Watches the budget and costs before the team commits. In this game: Keep capital back for later rounds; an empty pool cannot bid.
Risk and ethics officer: Flags harms and pushes back before the team commits. In this game: High debt share lowers WACC on paper but raises risk; the board notices.
Voice: Talks to other teams and presents the team's story at the debrief. In this game: Defend each bid against your own NPV: the board trusts consistent committees.

The three rounds

Each round you predict your own result, make your decisions within about 8 minutes, and then the model reveals what happened. An event card lands between rounds.

1
Round 1 · Infrastructure and retail
Three lots: solar farm, cold-chain warehouse and mall refurbishment. Set your WACC, read your NPV estimates and bid.
Watch for: Look at winning bid against realised value for each lot. The headline counts how many winners overpaid.
2
Round 2 · Growth and utilities
Three new lots: fintech joint venture, desalination stake and hotel. Round 1 results are on your phone. An event may have moved rates or cash flows.
Watch for: Check the gap on the risky fintech lot. Did the winner's estimate run far above the realised value?
3
Round 3 · Final lots
Two final lots: EV fleet and data centre. Your remaining capital is your bid limit, and Resilience no longer rewards holding capital back.
Watch for: Compare your total value created with how much you paid. Check whether you bid above your own estimate.

Your decisions

What each control on your phone does, and how to think about it.

Debt share D/V	Every round	0 to 80%. It sets your own WACC with your cost of equity and the after-tax cost of debt. It does not change what a project is truly worth. Above 50% it cuts Resilience; above 60% it also costs Trust. More debt lowers WACC on paper, which makes every NPV look bigger. Ask whether the risk is worth a number that only looks better.
Cost of equity estimate	Every round	6% to 24%. It sets your own WACC with the debt share. The market reference is 12% at the start. An estimate below 9% costs Trust. Riskier projects deserve a higher rate. Use the risk column, not optimism, to choose where you sit.
Sealed bids for project rights (AED m)	Every round	One bid per project on this round's lot, up to your capital left. The highest bid wins and pays its bid; ties split cost and value. Bid 0 to pass. Bids above your capital are scaled down. You are bidding for the NPV, not the investment. Bid below your estimate to allow for error. Bids over 110% of your own estimate cost Trust.

What you see on your phone

Expected cash flows (AED m): The plan for each project on this round's lot: the initial investment and the yearly cash flows. This is the same for everyone.
Your team's NPV estimate: Your private NPV for each project at 8%, 10%, 12% and 14%, with its risk level and your due-diligence note. The note adjusts cash flows and may be off by up to 10%.
Market rates: Reference cost of debt and equity, low-carbon debt rate after the green event, the 9% UAE corporate tax, and your capital left.
Round results: From Round 2: last round's winners, winning bids, number of bidders and realised values. An overrun warning appears if an event raised a project's investment.

How you are scored

Every game in the library uses the same scoreboard. Your round result is your Value created (AED m); the leaderboard adds resilience and trust.

Score = 100 × (0.5 × performance + 0.25 × resilience + 0.25 × trust) + prediction points

Performance: Value createdValue created in AED m each round: for each lot you win, its realised value minus your bid. Realised value is the true NPV at the market rate, with hidden adjustments and a random shock that is bigger for riskier projects.

Resilience (0–100)Resilience moves halfway each round towards a new score. It rises with capital held back (55% after Round 1, 25% after Round 2). It also rises with up to three project types won and with value created. A debt share above 50% cuts it sharply.

Trust (0–100)Trust gains 4 if you bid on at least one lot and loses 4 if you sit out. You lose 1.2 for every AED m bid above 110% of your own NPV estimate. A debt share above 60% or a cost of equity below 9% each cost 4.

Performance is your total Value created over the rounds, scaled from the lowest to the highest in the room. Before each round you also predict “Value you create this round”: land close and earn up to 10 bonus points; miss by the whole amount and earn none. The facilitator may change the weights before the game starts.

Tips

The bid is for the project's NPV, not its investment. A AED 120m project may be worth only a few tens of millions to own.
Your note is noisy and so is everyone else's. The committee with the most optimistic note tends to win.
Shade your bid below your estimate. The more uncertain the project, the bigger the margin of safety should be.
Read your NPV at the rate that matches the risk column, not at the lowest rate in the table.
Value created counts, not lots won. Losing an auction you would have overpaid for is a good outcome.

Common mistakes

Bidding the full NPV estimate. If you win, you probably overestimated, so you lose value.
Comparing the bid with the investment amount. A bid well under the investment can still be far above the NPV.
Pushing debt share up to lower WACC. Value does not change, but Resilience and Trust fall.

A worked example

Your committee uses 40% debt and a 12% cost of equity, a WACC of 9.4%. You bid AED 15m for the solar farm, 8m for cold-chain and 10m for the mall, and win all three. Solar realises AED 20.8m, a gain of 5.8m. Cold-chain and mall realise 6.1m and 8.0m, losses of 1.9m and 2.0m. Value created is about AED 1.9m, and the winner's curse line appears.

Shocks that can hit

The facilitator draws one event card before rounds 2 and 3. It changes the market from that round on.

Interest rates rise 200 bp. The central bank follows a global hike. Cost of debt rises two points and investors want more from equity too. Values fall.
Budget overrun. Contractor quotes come in high. The next lot's largest project now needs 30% more initial investment.
Green-finance facility. A sustainable-finance facility opens. Debt for low-carbon projects (solar, EV fleet, desalination) now costs 1.5 points less.
Oil price spike. Oil jumps and regional spending booms. Hotel and mall cash flows rise 15%.
Tech downturn. Global tech valuations slump and clients delay contracts. Fintech and data-centre cash flows fall 20%.

The model behind the game

NPV at WACC with a first-price sealed-bid auction. A project is worth its discounted cash flows minus its investment. You bid for the right to own it. Because each committee's estimate is noisy, the highest bidder is often the one who overestimated most.

WACC = E/V·r_E + D/V·r_D·(1 − 9%) ; NPV = Σ CF_t/(1+r)^t − I₀ ; value created = realised NPV − bid paid

Net present value (NPV): Today's value of future cash flows, discounted at a rate, minus the initial investment.
WACC: Weighted average cost of capital: equity cost and after-tax debt cost, weighted by their shares.
Discount rate: The return you require. Riskier projects deserve a higher rate and so a lower NPV.
Tax shield: Interest is tax deductible, so debt costs less after the 9% UAE corporate tax.
First-price sealed bid: Each bidder submits one hidden bid; the highest wins and pays exactly what it bid.
Winner's curse: The winner of an auction with noisy estimates has often overestimated the value.
Due-diligence note: Your private research. It shifts the plan cash flows but can be wrong by up to 10%.

For facilitators 3 rounds · about 50 minutes

Set-up

Team mode with four to eight committees works best; bots fill the room to four.
Allow 8 minutes per round. Round 1 needs time to read the cash-flow and NPV tables.
Before Round 1, explain that bids buy the NPV, not the investment, and the winner pays its own bid.
Tell teams their due-diligence notes differ and are private. Ask them not to share notes across teams.

Modes

Team: One committee per team. The Treasurer sets debt share, the Analyst cost of equity, and the Lead submits the sealed bids.
Individual: Every player is a committee, so each lot has many bidders and the winner's curse gets stronger. Bots appear only if fewer than four players join.
Hybrid: Each player bids alone but sits in a team, and the team board averages members' scores. Teammates may end up bidding against each other.

Run sheet

Before class	Open the facilitator console on the projector laptop, choose the mode in Setup, and check the QR shows.
0–5 min	Students scan and join. Read the situation aloud while teams form. Point out the roles on their phones.
5–15 min	Round 1: 8 minutes to decide and predict, then Reveal. Read the headline and one surprising line from a team.
Between rounds	Draw or choose the event card. Give teams 30 seconds to read it before opening the next round.
15–25 min	Round 2, then Reveal.
27–37 min	Round 3, then Final results: podium, awards and the score chart.
Last 12 min	Debrief with the questions below, then open reflections (4 minutes). Download the CSV.

What usually happens

Several winners overpay in Round 1. Read the headline aloud and ask why the highest bidder lost money.
The fintech lot draws aggressive bids because of its late cash flows. Use it to discuss risk and discount rates.
Some teams raise debt share to justify bigger bids. Point out that realised value ignores their WACC.
Teams that sit out lose Trust. Discuss whether passing is discipline or a failure to deploy capital.

Debrief questions

Did the highest bidders overpay? Compare winning bids with realised values on the screen.
Which project had the widest gap between the winning bid and its value, and why?
How did your choice of debt share and cost of equity change what you were willing to pay?

Follow-up probes

What margin of safety did you leave between your estimate and your bid, and why that size?
Did your WACC choice change what you bid? Should it have, given realised value uses the market rate?
How would you change your bids if you knew five rivals were bidding instead of two?
Which event changed a project's value most, and did the bids adjust?
When is it right for a real investment committee to walk away from a deal?

Reflection and evidence

Write a short investment memo for your best and your worst project: the NPV you expected, the discount rate you used, what you paid, and what you would do differently.

Students write 80–120 words on their phones. The Data tab exports every decision, result, prediction and reflection as one CSV for grading.

Console controls

Pause, extend or set the timer; step back a round
Draw, choose or write the event card
Move players, make a Lead, add computer players
Award or fine with a reason that appears on phones
Message every screen; hide names; spotlight a team
Keys: P projector mode, Q join QR