Based on its growth prospects a private investor values a


Based on its' growth prospects, a private investor values a local bakery at $750,000. She believes that cost savings having a PV of $50,000 can be achieved by changing staffing levels and store hours. She believes the appropriate liquidity discount is 20%. A recent transaction in the same city required the buyer to pay a 5% premium to the average price for similar businesses to gain a controlling interest in a bakery. What is the most she should be willing to pay for a 50.1% stake in the bakery?

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Financial Management: Based on its growth prospects a private investor values a
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