A company has 1,000,000 shares outstanding trading at $15 apiece. Managers believe that the discount rate appropriate

Question:

A company has 1,000,000 shares outstanding trading at $15 apiece. Managers believe that the appropriate for the risk borne is 15% and total cash flows, expected to be $1 million next year, will rise by 5% per year indefinitely. Discuss a strategy that is beneficial to the current shareholders.
Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...