Your firm, a stable Fortune 1000 corporation, is considering the acquisition of a very promising technology company in the Washington DC, who have a focus on governmental contracts. Half of the executives argue against the move, pointing out that because the technology company is presently losing money, the acquisition will cause your firm's return on equity to fall. Other executives favor the move because it diversifies the firm.

You are the CEO. What additional information do you need to make an informed decision? Let's assume that the ROE projections are correct, what would you do, and why? Or let's assume that the ROE projections are incorrect, what would you do, and why?