own_quality
I defer to you as the subject-matter expert. . . . but your approach of using a very low discount rate and then paying a premium of this 40% to this valuation to arrive at an M&A price makes no real sense to me.
I have certainly seen situations where a rational corporate will value a bolt-n acquisition target using a low corporate WACC (although - even then, it is a rare corporate that has a WACC of less than 9%), but will then recognise that to be value-creating they have to pay a DISCOUNT to this figure.
Cheers
GD
wilson's assumptions - are they valid?, page-15
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