Market Assumptions Valuation Model

Riskfree Rate 5.00%

Market Risk Premium 10.00% Cal. Year Year Growth RaFCF ($M) Terminal VTotal PV
2013 0 10% 5 5
Equity Assumpitons 2014 1 10% 6 6 5.10
Beta ß 1 2015 2 10% 6 6 4.88
Cost of Equity 15.00% 2016 3 10% 7 7 4.66
MV of Equity est ($M) 2000 2017 4 10% 8 8 4.46
2018 5 10% 9 9 4.27
Debt Assumptions 2019 6 25.00% 9 -118 -109 -46.95
Pre-tax Cost of Debt 4.50%
Effective Tax Rate 30.0% Firm Value -23.58
After-tax Cost of Debt 3.15%
MV of Debt est 0.00 Debt Value 0.00
Equity Value -23.58
Firm Assumptions Shares Outstanding 100
Firm Value est ($M) 2000.00
Debt to Equity Ratio 0.00% Intrinsic Value/Share -0.24
WACC 15.00%
Initial Cash Flow 5.33 Market Price/Share
Long Term (Terminal) Growth Rate 25.00%

Analysis of Historical FCF Data $M % Change

2009 1000
2010 1300 30
2011 1508 16
2012 2166 43.63395
2013 2517 16.20499

Average FCF 1698.2

Market Assumptions Valuation Model
Riskfree Rate 3.50%
Market Risk Premium 5.50% Cal. Year Year Growth RaFCF ($M) Terminal VTotal PV
2013 0 10% 2 2
Equity Assumpitons 2014 1 10% 2 2 2.03
Beta ß 2.72 2.72 2015 2 10% 2 2 2.06
Cost of Equity 18.46% 2016 3 10% 3 3 2.09
MV of Equity est ($M) 660 2017 4 10% 3 3 2.12
2018 5 10% 3 3 2.15
Debt Assumptions 2019 6 3.00% 4 67 70 43.14
Pre-tax Cost of Debt 4.50%
Effective Tax Rate 27.4% 27.37 Firm Value 53.57
After-tax Cost of Debt 3.27%
MV of Debt est 795.00 Debt Value 795.00
Equity Value -741.43
Firm Assumptions Shares Outstanding 660
Firm Value est ($M) 1455.00
Debt to Equity Ratio 9.00% 42.79 Intrinsic Value/Share -1.12
WACC 8.47% 2.53
Initial Cash Flow 2 Market Price/Share
Long Term (Terminal) Growth Rate 3.00%

Analysis of Historical FCF Data $M % Change

2009 100
2010 95 -5
2011 108 13.68421
2012 109 0.925926
2013 100 -8.25688

Average FCF 102.4

Market Assumptions Valuation Model
Riskfree Rate 2.86%
Market Risk Premium 6.00% Cal. Year Year Growth RaFCF ($M) Terminal VTotal PV
2017 0 0% -41 -41
Equity Assumpitons 2018 1 10% -41 -41 -39.34
Beta ß 0.24 2019 2 10% -45 -45 -41.51
Cost of Equity 4.30% 2020 3 10% -50 -50 -43.81
MV of Equity est ($M) 852 2021 4 10% -55 -55 -46.24
2022 5 10% -60 -60 -48.80
Debt Assumptions 2023 6 3.00% -66 -5536 -5602 -4369.76
Pre-tax Cost of Debt 4.50%
Effective Tax Rate 20.0% Firm Value -4589.47
After-tax Cost of Debt 3.60%
MV of Debt est 97.00 Debt Value 97.00
Equity Value -4686.47
Firm Assumptions Shares Outstanding 1002
Firm Value est ($M) 949.00
Debt to Equity Ratio 10.22% Intrinsic Value/Share -4.68
WACC 4.23%
Initial Cash Flow -41 Market Price/Share 0.85
Long Term (Terminal) Growth Rate 3.00%

Analysis of Historical FCF Data $M % Change

2013 23
2014 16 -30.4348
2015 -1 -106.25
2016 -6 500
2017 -41 583.3333

Average FCF -1.8