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What is the potential effect of growth on burton stock price

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Question - Suppose you are the FP&A team at Burton. The president of the company, Amy Marshall, has asked your team to help her with three important investment and financing decisions-the purchase of new thermowell machines, the acquisition of Electro-Engineering, and a plan to raise additional capital through a private placement.

Amy Marshall has asked you to provide an analysis on the following this week:

1. How did Burton end up in financial distress? Is the situation temporary? Does the company need to raise external financing immediately?

2. Should the company continue to pursue a high-growth strategy, or should the company slow down its growth?

3. If Burton were to continue a high-growth strategy, how can it finance its growth? What is the potential effect of growth on Burton's stock price?

4. Should Burton purchase the thermowell machines? Assuming a 6% market risk premium, what is the NPV of this investment?

Reference no: EM133188942

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