Harmanvaluation

FCFF STABLE GROWTH MODEL

This model is designed to value a stable firm on the basis of

free cashflows to firm.

Assumptions in the model:

1. The firm is in steady state and will grow at a stable rate forever.2. The firm's leverage is known and http://wendang.chazidian.comer defined inputs

The user has to define the following inputs to the model:1. Current EBIT and tax rate2. Capital Spending and Depreciation3. Change in working capital4. Debt ratio

5. Cost of Equity or Inputs to the CAPM (Beta, Riskfree rate, Risk Premium) and Cost of Debt6. Expected Growth Rate in free cashflows to firm forever.

FCFF Stable Model

Please enter inputs to the model: Revenues Current Debt = Cash & Marketable Securities = Minority holdings in other companies Minority (Non-controlling) interests Current EBIT Effective tax rate = Marginal tax rate = Do you want to compute the reinvestment rate from fundamentals? If yes, enter the after-tax return on capital in perpetuity = If no, enter the inputs to compute reinvestment below Capital Expenditures Depreciation = Working capital as % of revenues Do you want to change the capital expenditure/depreciation ratio? If so, enter capital expenditures as a percent of depreciation Debt ratio = Are you directly entering the cost of equity? (Yes or No) If yes, enter cost of equity = If no, enter the inputs for the CAPM Beta of the stock = 1.2260 10.00% (in percent) 5.06% ( in percent) No $206.40 $128.20 13.54% (in currency) (in currency) (in currency) If negative, enter zero. No 125% (Yes or No) $284.45 18.21% 40.00% No 21.04% Yes or No $4,297.80 $289.00 $515.00 $0.00 $0.00 (in currency) Added back $83.2 million in restructuring charges from 2013

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Please enter inputs to the model:Revenues

Current Debt =

Cash & Marketable Securities =Minority holdings in other companiesMinority (Non-controlling) interestsCurrent EBITEffective tax rate =Marginal tax rate =

Do you want to compute the reinvestment rate from fundamentals?

If yes, enter the after-tax return on capital in perpetuity =If no, enter the inputs to compute reinvestment belowCapital Expenditures

Depreciation =

Working capital as % of revenues

Do you want to change the capital expenditure/depreciation ratio?If so, enter capital expenditures as a percent of depreciationDebt ratio =

Are you directly entering the cost of equity? (Yes or No)If yes, enter cost of equity =If no, enter the inputs for the CAPMBeta of the stock =

(in currency)

Added back $83.2 million in restructuring charges from 2013

Yes or No

(in currency)

(in currency)

(in currency)( in percent)

(in percent)

FCFF Stable Model Riskfree rate = Risk Premium= Enter the pre-tax cost of debt = 2.75% 6.13% 4.75% (in percent) (in percent) Ten-year T.Bond rate Global ERP, weighted by GDP. This is a pre-tax cost of borrowing.

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Riskfree rate =

Risk Premium=

Enter the pre-tax cost of debt =

(in percent)(in percent)

Ten-year T.Bond rate

Global ERP, weighted by GDP.This is a pre-tax cost of borrowing.

FCFF Stable Model Expected Growth Rate = 2.75% (in percent) The expected growth rate for a stable firm cannot be significantly higher than the nominal growth rate in the economy in which the firm operates. It can be lower. Warnings: Capital Spending seems high relative to depreciation This is the output from the Model Adjusted Operating Income (for leases & non-recurring expenses) = Adjusted Debt ratio for leases = $ 313.19 7.39%

Firm Details: from inputs on prior page EBIT (1- tax rate) = - (Capital Spending - Depreciation) - Change in Working Capital Free Cashflow to Firm = $263.21 $80.35 $16.01 $166.85

Cost of Equity = Cost of Debt = Cost of Capital = Expected Growth rate =

10.26% 2.85% 9.71% 2.75%

Value of operating assets =

$2,462.27

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Expected Growth Rate =

(in percent)

The expected growth rate for a stable firmcannot be significantly higher than the nominal

growth rate in the economy in which the firmoperates. It can be lower.

This is the output from the Model

Adjusted Operating Income (for leases & non-recurring expenses) =Adjusted Debt ratio for leases =

$ 313.19

7.39%

Firm Details: from inputs on prior pageEBIT (1- tax rate) =

- (Capital Spending - Depreciation) - Change in Working CapitalFree Cashflow to Firm =

FCFF Stable Model

+ Cash & Marketable Securities + Minority cross holdings - Debt - Minority Interests Intrinsic Value of Equity = $

$515.00 $0.00 313.19 $0.00 $2,664.08

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