Conversely, free cash flow declined at a rate of 15.6%.

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As a result the most important variables to the price of an asset are the level and future shape of free cash flows, and the discount rate used, which, as you rightly point out, can be analysed in terms of risk premium.

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My assumption is enormous free cash flow accumulation is reinvested at a high rate of return plus aggressive share buybacks.

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Free cash flow in the same period declined at a rate of 11.8%.

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Over the same time period its revenue per share increased at an annual rate of 5.2%, free cash flow at 19.3% and book value at 8.1%.

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The more conservative method is to use a Modified IRR (MIRR) where all of the cash flows are assumed reinvested at the lower risk free rate.

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In the last five years, it has grown revenue per share at a rate of 14.8% annually, EBITDA at 29.5% annually, free cash flow at 14.6% annually and book value at 13.3% annually, according to its 10-year financials.

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The discounts are not so spectacular in a taverna, however, for cash a better rate on the price of fresh fish is to be had, or desert is free.

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