Taking the same circumstances as in Problem 14.1, without the takeover CDD Ltd had expected annual end-of-year
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Taking the same circumstances as in Problem 14.1, without the takeover CDD Ltd had expected annual end-of-year cash inflows of £1.5m for ever, and an estimated cost of capital of 18 per cent p.a.
What is the minimum that the shareholders of CDD Ltd should logically accept for their shares in the takeover?
Logically, what should be the finally agreed total price for CDD Ltd’s equity?
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