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Appropriate risk-adjusted discount rate

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Reference no: EM132740159

You friend is selling his Dairy Queen franchised that he owns in a corporation that has 1 million shares outstanding. The corporation has Free Cash Flow to the Firm projected at $250,000 for next year. This cash flow amount is expected to grow by 2% at the end of year 2 and every year thereafter. The appropriate risk-adjusted discount rate is 11%. What price per share would you suggest is fair?

 

 

Reference no: EM132740159

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