Subject category:
Finance, Accounting and Control
Published in:
1991
Length: 11 pages
Data source: Published sources
Share a link:
https://casecent.re/p/23457
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Abstract
The case concerns a company with a strategy of growth through conglomerate diversification. It has the aim of increasing its shareholder''s wealth by reducing their risk through conglomerate diversification and at the same time increasing their earnings per share and dividends through its acquisition policy of companies that are perceived by Hawk Holdings'' managers as being undermanaged. Subsidiary themes in the case are the problems of financing this conglomerate expansion and the problem of investment appraisal within the conglomerate, with particular attention being paid to the choice of relevant discount rates.
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Abstract
The case concerns a company with a strategy of growth through conglomerate diversification. It has the aim of increasing its shareholder''s wealth by reducing their risk through conglomerate diversification and at the same time increasing their earnings per share and dividends through its acquisition policy of companies that are perceived by Hawk Holdings'' managers as being undermanaged. Subsidiary themes in the case are the problems of financing this conglomerate expansion and the problem of investment appraisal within the conglomerate, with particular attention being paid to the choice of relevant discount rates.