Question: Based on its growth prospects, a private investor values a local bakery at $750,000. She believes that cost savings having a present value of $50,000

Based on its growth prospects, a private investor values a local bakery at $750,000. She believes that cost savings having a present value of $50,000 can be achieved by changing staffing levels and store hours. Based on recent empirical studies, she believes the appropriate liquidity discount is 20%.Arecent transaction in the same city required the buyer to pay a 5%premiumto the average price for similar businesses to gain a controlling interest in a bakery. What is the most she should be willing to pay for a 50.1% stake in the bakery?

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