Assuming the company ONLY survives for 3 years and that each...

Assuming the company ONLY survives for 3 years and that each year earnings reduce by 6% (not up with inflation, just down as they did relative to last year) and discounting at 20% which is higher than the standard 10% you get a valuation of 25c



Assuming the company lives 10y you get a valuation of 32c



Even going as high as using a discount rate of 30% you for 10y you get 25c... And I'm not sure many people here have an oportunity cost of 30% (other investments that can yield 30%)

So let's walk backwards and look at the market expectations...
Liquidation value is 10M and current price is 17M

In a year time with a discount rate of 30% (very high) it should be about 19.5c. (double)

So the market expects that the company is NOT going to make it to 1 year with a probability of

The market is literally assuming that the company is NOT going to make it to 1 year and will make it to a most to 1 year with a probability of not making it to a year of X of X*10+(1-X)*20=17

Where X is 30%.

I am pretty sure in a year this company will stand around.