If he were that kind of hands-on manager, this mess might not have happened in the first place.
The real risk-free rate is 4%. 1. The real risk-free rate is 4%. Inflation is expected to be 3% this year and 5% during the next 2 years. Assume that the maturity risk premium is zero.
Discount rates are usually set using the risk-free rate as a benchmark, which could be the 5, 7 or 10-year Treasury bond as a reference point. A slight increase in interest rates would cause a big movement in those risk-free rates, which then affects the entire DCF formula. As the denominator (interest rate) increases, the intrinsic value of your stock decreases.