M09-04-ValuationModelBasedon_r_and_b

Model09-04AValuationModelBasedonrandbDefinition,ZeroGrowthinTerminalPeriod[TextEquation(9C.12)inTable9C.1]ValueDriversValuation:Xo=$1,0001stTerm=$3,603T=40.0%22.9%b=60.0%r=30.0%2ndTerm=$12,107g=18.0%77.1%n=10=========k=10.0%TotalValue=$15,710100.0%where:Xo=theearningsbeforeinterestandtaxes(EBIT)ornetoperatingincome(NOI)T=theactualcashtaxrateb=investmentperperiodnormalizedby(dividedby)theafter-taxEBITr=marginalprofitabilityrateg=thegrowthrateinafter-taxcashflowsn=thenumberofperiodsofsupernormalgrowthk=theapplicablemarginalweightedcostofcapital=??????++--?=tntokgbTX111)1)(1(=??????++-nokgkTX11)1(Model09-04BConstantGrowthValuationModelBaseCaseAlternativeX0=$698$698T=40.0%40.0%b=40.0%40.0%r=25.0%25.0%g=10.0%10.0%k=13.5%14.0%Valuation:$7,897$6,910where:Xo=theearningsbeforeinterestandtaxes(EBIT)ornetoperatingincome(NOI)T=theactualcashtaxrateb=investmentperperiodnormalizedby(dividedby)theafter-taxEBITr=marginalprofitabilityrateg=thegrowthrateinafter-taxcashflowsk=theapplicablemarginalweightedcostofcapital=-+--gkgbTX)1)(1)(1(0Model09-04CValuationModelBasedonrandbDefinition,ConstantGrowthinTerminalPeriod[TextEquation(9C.13)inTable9C.1]ValueDriversValuation:Xo=$1,0001stTerm=$3,603T=40.0%17.7%bs=60.0%bc=20.0%2ndTerm=$16,789rs=30.0%82.3%rc=20.0%=========gs=18.0%TotalValue=$20,392gc=4.0%100.0%n=10k=10.0%where:Xo=theearningsbeforeinterestandtaxes(EBIT)ornetoperatingincome(NOI)T=theactualcashtaxratebs=investmentrateduringsupernormalgrowthperiodbc=investmentrateduringterminalperiodrs=marginalprofitabilityrateduringsupernormalgrowthperiodrc=marginalprofitabilityrateduringterminalperiodgs=growthrateduringsupernormalgrowthperiodgc=growthrateduringterminalperiodn=thenumberofperiodsofsupernormalgrowthk=theapplicablemarginalweightedcostofcapital=++--=tntssokgbTX111)1)(1(=??????++-+--nscccokggkgbTX11)1)(1)(1(