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How much would you pay to acquire a $5 million cash flow company with no debt that can be reorganized to generate annual cash flows
How much would you pay to acquire a $5 million cash flow company with no debt that can be reorganized to generate annual cash flows of $12 million per year for 5 years and then be sold at PE multiple of 15 if the companys earnings have a beta of 1.5 to the broad market, the risk-free rate is 4% and the expected excess return from the equity market is 10% per year?
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