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Q196) Suppose Benzy has a business that generates a cash flow of $100. It has a growth rate in cash flows from time one to
Q196) Suppose Benzy has a business that generates a cash flow of $100. It has a growth rate in cash flows from time one to time two of 19%, and from time two to time three the growth rate in cash flows is 28%. Suppose in the economy Benzy lives in that the discount rate is 0.1. If John comes today and purchases the business at time zero, calculate what is the holding rate of return between time zero and time two. Ensure to clearly show teps and calculations in the process. You may chose to round your final answer to two decimal places.
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