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Case Problem 2.1Dara ’ s Dilemma : What to Buy ? Dara Simmons , a 40-year-old financial analyst and divorced mother of two teenage children , considers herself a savvy investor . She has increased her investment portfolio considerably over the past five years . Although she has been fairly conservative with her investments , she now feels more confident in her investment knowledge and would like to branch out into some new areas that could bring higher returns . She has between $ 20,000 and $ 25,000 to invest . Attracted to the hot market for technology stocks , Dara was interested in purchasing a tech IPO stock and identified NewestHighTech . com , a company that makes sophisticated computer chips for wireless Internet connections , as a likely prospect . The 1-year-old company had received some favorable press when it got early-stage financing and again when its chip was accepted by a major cell phone manufacturer .
Dara also was considering an investment in 400 shares of Casinos International common stock , currently selling for $ 54 per share . After a discussion with a friend who is an economist with a major commercial bank , Dara believes that the long-running bull market is due to cool off and that economic activity will slow down . With the aid of her stockbroker , Dara researches Casinos International ’ s current financial situation and finds that the future success of the company may hinge on the outcome of pending court proceedings on the firm ’ s application to open a new floating casino on a nearby river . If the permit is granted , it seems likely that the firm ’ s stock will experience a rapid increase in value , regardless of economic