You have decided to use the discount cash flow approach to value AfC. Based on the riskiness of the new business you believe a 30 percent discount rate is appropriate. What is the forecasted value of the AFC to its equity holders? (Hint use the cash flow in Table 2 as a starting point.) Assume no cost or $0 at time ) or today or CFo, etc you will need to make adjustments.

What percentage of common stock would you require to invest the needed value of the company in the above question? Would Dr. Alphine be willing to sell you this percentage ownership of AFC?

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