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Diversifying operations

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(Answer using Excel) :The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations. Some recent financial information for the company is shown below:

Stock price = $75
Number of shares = 65,000
Total Assets = $9,400,000
Total liabilities = $4,100,000
Net income = $980,000

MHMM is considering an investment that has the same PE ratio as the firm. The cost of the investment is $1,500,000, and it will be financed with a new equity issue. The return on the investment will equal MHMM's current ROE.
a. What will happen to the book value per share, the market value per share, and the EPS?
b. What is the NPV of this investment?
c. Does dilution take place?
d. What will be the ROE on the investment have to be if we wanted the price after the offering to be $75 per share? (Assume the PE ration remains constant.)
e. What is the NPV of this investment?

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(Answer using Excel) :The Metallica Heavy Metal Mining (MHMM) Corporation wants to diversify its operations.  Some recent financial information for the company is shown below:

Stock price $75.00
Number of shares 65,000
Total Assets $9,400,000
Total liabilities $4,100,000
Net income $980,000

MHMM is considering an ...

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page 1 Level of diversification: What are GE's areas of diversification? Evaluate the potential strengths, weaknesses, opportunities, and threats of the diversification approach.

page 2 help International operations: Look at GE's operations in many countries. Who are their competitors? Evaluate the similarities and differences of GE's strategy compared to their competitors.

page 3 help Recent events: Look for GE's engagement in two or more acquisitions or mergers, about which you can collect information. Discuss the corporate strategy and evaluate how it has benefited GE's acquisition growth and product line.

page 4 help Alliance or joint venture: Select two or more alliances or joint ventures as a meaningful part of one or more of its business strategy. Evaluate the strategy and how well it has worked. Analyze some of the issues encountered. Assess whether the business-level strategy fits their diversification core. List references separately

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