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Name: Javier Sancho Guevara
Affiliation: Finanzas Corporativas Continental
E-mail: bcontin@racsa.sol.co.cr
Date: 16 Oct 1997
Time: 12:16:10
Good Morning,
I wrote to the webmaster couple a day ago. I've been working on a Banana Plantation Cash Flow valuation. So far so good, the problem I've having is that I can get a discount rate in which I feel confortable to valuate the business.
The structure I've proposed is first the US Long Bond rate as the free risk rate, then I manage to calculated the Costa Rica Risk through our Class A Brady Bonds. Thirdly with the help of the Ibbotson Associates Inc. Yearbook I obtained the premium for investing in the stock market. Now the problem I have is to establish the ideal non-systematic risk value in order to complete the scenario. The result I get so far is around 15%.
Maybe through your experience can help to determine this final approach. My feeling tells me or if I were to invest in such think the discount rate I'll use will be around 20% but I don't have such thing as a beta to clearify the analysis. I' ll be more that thankful if you can help me out...
Thanks for the cooperation and best regards,
Javier Sancho
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