Should Marshall acquire Electro-Engineering, Inc. (EE)?

Description

Course Project: Burton Sensors, Inc. You must construct an analysis of Burton Sensors, Inc. In your analysis, you should address answers to the following questions:

1. Should Marshall continue to pursue a 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 machines? In calculating the weighted-average cost of capital, use 5.8% 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 sheets?

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? Your report should not exceed more than 5 pages, but appendices can be attached with supporting tables presenting your analysis. Your report must be self-contained, answering each question with reference to your supporting tables in the appendix. 1. Citations and references, use of outside information: The case should be entirely self-contained. All answers should be drawn from information given in the case. 2. Number of pages: The full response to the case should take between 1 to 5 pages of writing. Tables (attached at the end) will not count towards the page count. 3. Supporting tables: As with exams, you are more likely to get partial credit if you show how you arrived at the conclusions that you did. You are welcome to attach any supporting spreadsheets or calculations that you think might help convey this information. Note, however, that the grader will ultimately be the judge of what can be understood from the materials that you submit. You should make an effort to be very clear about what you show. The grader is not required to intrepret what was might have been meant by a few obscure calculations. I have attached marking rubrics . please see that for instructions on how u need to answer the questions.