Enterprise Value

Antique Ltd wants to acquire HQ Ltd. Antique Ltd believes that the acquisition will help them to grow in the future. The operating assets would generate a cash inflow of 15,000 every year in perpetuity. The book value of operating assets of HQ Ltd is valued at 1,20,000. The discount rate is 12%.

Antique Ltd believes that the purchase price of HQ Ltd should be determined only by valuing its operating asset and not the estimated future growth.

Based on this comprehension, identify which of the following statements is correct. (Answer based on the limited information available.)