Recreational marijuana sales are at all-time highs and the California budget is looking better! The Governor has decided NOT to sell CSUSM (the bid prices were too low). Instead, Californians have decided to value education more. State Planners have now come to him with a proposal to buy some school up north called Pepperdine University and make it a new "CSU-Pepperdine." Answer the following questions: 1. Looking at only cash flow from tuition and keep it running as a school, what would be a very rough "reasonable" price to pay for Pepperdine? Explain why and how you got that price 2. The Governor wants to get an IRR of at least 10%. Then, what price can he very roughly offer? Explain 3. WHY and HOW did you get that price? 4. What assumption did you make about the interest rate and why? 5. What does it tell you about the deal NPV? The "buyer" who be the CSU System, what are your thoughts on the WACC for the CSU 6. System? How and why it should be, and if there is a better alternative route the Governor can use to finance the purchase bid? 7. Bonus Question: Any other finance tools, techniques, or considerations come to mind? Recreational marijuana sales are at all-time highs and the California budget is looking better! The Governor has decided NOT to sell CSUSM (the bid prices were too low). Instead, Californians have decided to value education more. State Planners have now come to him with a proposal to buy some school up north called Pepperdine University and make it a new "CSU-Pepperdine." Answer the following questions: 1. Looking at only cash flow from tuition and keep it running as a school, what would be a very rough "reasonable" price to pay for Pepperdine? Explain why and how you got that price 2. The Governor wants to get an IRR of at least 10%. Then, what price can he very roughly offer? Explain 3. WHY and HOW did you get that price? 4. What assumption did you make about the interest rate and why? 5. What does it tell you about the deal NPV? The "buyer" who be the CSU System, what are your thoughts on the WACC for the CSU 6. System? How and why it should be, and if there is a better alternative route the Governor can use to finance the purchase bid? 7. Bonus Question: Any other finance tools, techniques, or considerations come to mind