Potential effect of growth on burton stock price

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Reference no: EM132918951

Case 1: Burton Sensors, Inc.

1. Should Marshall continue to pursue high-growth strategy? How can she finance it?

What is the potential effect of growth on Burton's stock price?

2. Should Marshall purchase the thermowell machine? In calculating the WACC, use 6% as the equity risk premium.

3. Should Marshall accept the offer of the private investor and issue new equity? How does the deal affect Burton's existing shareholders? What is the effect of the issuance on Burton's balance sheet?

4. Should Marshall acquire Electro-Engineering, Inc. (EE)? What is the most important consideration? Even if the NPV of the acquisition is zero, should she still proceed?

5. Does the acquisition allow EE to gain enough funding to invest in the purchase of thermowell machines?

Reference no: EM132918951

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