This case study looks into the acquisition of a plant by a small chemical manufacturer. It allows students to compute and look at the projected cash flow associated with the acquisition.
William E. Fruhan and John P. Goldsberry
Harvard Business Review (280102-PDF-ENG)
March 01, 1980
Case questions answered:
- Estimate the Cost of Equity.
- Estimate the Cost of Debt and the WACC.
- Project the Cash Flow without Laminate Technology.
- Project the incremental cash flows associated with the acquisition of Collinsville.
- Would you invest in the new plant without the new technology?
- Would you invest in the new plant with investment in new technology?
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Case answers for American Chemical Corp.
This case solution includes an Excel file with calculations.