Read Dow Chemical’s Bid for the Privatization of PBB in Argentina case and answer the question.

Question:1) Identify the cash flows, the discount rate, and the method for calculating fair market value for the 3 stages.

2) Calculate the fair market value of the 3 stages under consideration by Dow (based on step 1).

3) Calculate a bid price based on the fair market value (from step 2) for each stage.