Neuren Media and Analyst Coverage, page-801

correct - I am used to employing DCF models to evaluate projects in iron ore and gold mining. I used discount rates as high as 15% to account for many more risks in mining than present themselves in pharmaceuticals - risks such as ore body modelling or geological risks, geotechnical risks, mining and processing cost risks, mining dilution risks, process recovery risks, commodity pricing risks and exchange rate risks. DCFs were used to calculate the internal rates of return to determine if a project like a new excavator or a mine expansion were worthwhile or not. I never got to the rarified level of determining the takeover value of another company though, so I suppose there could be other methods of determining that proposition, but I reckon a DCF model would have to be a basic starting point. And a DCF model would also take into account cost savings from corporate expenses, or operating synergies etc.