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DOUBT – OPTION 2 MANGEMENT BUYOUT
in the note they have told us that the cash flow for the first year will increase by 8% and then stay fixed for foreseeable future
I’m that case we should have found out the value in two phases
Phase 1 – increase the cash flow by 8% and discount it at present value
Phase 2 – calculate the
Perpetuity of cash flow and discount it to PVTOTAL VALUE = VALUE AT PHASE 1 AND VALUE AT PHASE 2
WHY HAVE THEY CALCULATED IT DIFFERENTLY?
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