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The expected inflation rate for the foreseeable future is 7% (as given in Exhibit 2 of the case). Assuming that the expected inflation in France
The expected inflation rate for the foreseeable future is 7% (as given in Exhibit 2 of the case). Assuming that the expected inflation in France over the same future period is 3%, what is Groupe Ariel's discount rate in Pesos? (We should not use the inflation rates provided in Exhibits 3 and 4 because those are past rates; we need future / expected rates for our calculation.)
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