You estimate that the present value of a firm's cash flow is $15 million. The break-up value of the firm if you were to sell the major assets and divisions separately would give $20 million. This is an example of what Peter Lynch would call a/an ________.

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This situation is an example of an "asset play," which refers to a company whose assets are worth more separately than the value of the entire company. In this case, the break-up value of the major assets and divisions is $20 million, while the present value of the cash flow is only $15 million. This implies that by selling off the assets separately, an investor could potentially make a profit of $5 million.

You Estimate That the Present Value of a Firm's Cash