alibaba i pose pt 14

Date of valuation Sep-14Company name Alibaba There should be a check against the iteration box. If there is not, you will get circular reasoning errors.

Numbers from your base year below ( in consistent units)This year Last year

Country of incorporation China Alibaba gets about 90% of its revenues in China and 10% internationally. The ERP I use reflects that mixIndustry (US) Advertising The bulk of Alibaba's revenues still come from advertising, though it is building other revenue sourcesIndustry (Global) Advertising Year ended 3/31/13Revenues $ 9,268.00 $4,820.99 Operating income or EBIT $ 4,246.33 $1,777.02 Interest expense $ 245.75 $ 259.83 Book value of equity $ 8,283.00 $5,027.60 Book value of debt $ 10,012.00 $4,642.98 Do you have R&D expenses to capitalize? Yes Am assuming product development expenses are R&D, with 2-year life Do you have operating lease commitments? Yes Minimal, but took lease expenses for years 2-5 and averaged to get annual leaseCash and cross holdings $ 9,330.00 $5,402.64 Non-operating assets $ 5,087.00 $ 400.99 Minority interests $ - $ - Number of shares outstanding = 2440.91 Shares outstanding + RSUs. Prospectus (Aug 2014)Expected proceeds from IPO = 20000.00 News stories, not confirmed yetExpected IPO price $ 65.00 No offering price yet (estimate based on $150 bilEffective tax rate = 11.92% Effective tax rate (Last fiscal year)Marginal tax rate = 25.00% China statutory rateThe value drivers below:Compounded annual revenue growth rate over next 5 y 25.00% China online retail growthTarget pre-tax operating margin (EBIT as % of sales in y 40.00% Competition is picking upSales to capital ratio (for computing reinvestment) = 2.00 More reinvestment in both internal projectsMarket numbers and acquisitions.Riskfree rate 2.41% Valuation is done in US dollarsInitial cost of capital = 8.56% Cost of capital reflects business mix (advertising + online) and geographic exposure (90.3% in China, 9.7% rest of the world)Other inputs See cost of capital worksheetDo you have employee options outstanding? YesNumber of options outstanding = 13.35 Prospectus.Average strike price = $14.29 Average exercise price from prospectus (Page 300)Average maturity = 4.20 Average maturity from prospectus (Page 300)Standard deviation on stock price = 37.20% Using standard deviation in online companies listed in the US

Default assumptions. In stable growth, I will assume that your firm will have a cost of capital similar to that of typical mature companies (riskfree rate + 4.5%)Do you want to override this assumption = YesIf yes, enter the cost of capital after year 10 = 8% Slight drop in cost of capital as company becomes matureI will assume that your firm will earn a return on capital equal to its cost of capital after year 10. I am assuming that whatever competitive advantages you have today will fade over time.Do you want to override this assumption = NoIf yes, enter the return on capital you expect after year 12% In steady state, this will be a tough business to generate excess returns in, even with network effects.I will assume that your firm has no chance of failure over the foreseeable future.Do you want to override this assumption = No Already profitable, plenty of cash.If yes, enter the probability of failure = 20%What do you want to tie your proceeds in failure to? VEnter the distress proceeds as percentage of book or fai 50%I will assume that your effective tax rate will adjust to your marginal tax rate by your terminal year. If you override this assumption, I will leave the tax rate at your effective tax rate.Do you want to override this assumption = No Tax credits will disappear over time.I will assume that you have no losses carried forward from prior years ( NOL) coming into the valuation. If you have a money losing company, you may want to override tis.Do you want to override this assumption = NoIf yes, enter the NOL that you are carrying over into yea $250.00

Important:

C4

Aswath Damodaran: If you are using trailing 12-month data, it is best if the last year is the 12-month period just prior to the one that you are using. Thus, if you are looking at June 2011-June 2012, your trailing 12 month for the income statement numbers will be June 2010-June 2011 and your balance sheet numbers should be as of June 2011.

B6

Aswath Damodaran: If you are in multiple businesses, you can construct your own weighted averages using the industry average table from this spreadsheet and your company's business breakdown.

B8

Aswath Damodaran: Enter the revenues from the most recent period (you can either use annual or the trailing 12 months). If your company had no revenues, enter a very small positive number. (You need a base for your growth rate)

B9

Aswath Damodaran: Enter the operating income or EBIT from the most recent time period, even if that number is negative. If you have operating leases, enter the adjusted operating income (see the operating lease worksheet for the amount you have to adjust operating income by).

B11

Aswath Damodaran: Enter the book value of equity (total) from the end of the most recent time period (i.e. the most recent balance sheet). This book equity will include everything - paid in capital, retained earnings etc. and may even be negative for companies that have been losing money for a while.

B12

Aswath Damodaran: Enter the book value of interest bearing debt (short and long term) at your company from the most recent balance sheet. (Do not include accounts payable, supplier credit or other non-interest bearing liabilities.)

B15

Aswath Damodaran: Enter the cash balance from the most recent balance sheet. This should include marketable securities.

B16

Aswath Damodaran: Enter the market value of those non-cash assets whose earnings are (and will never) show up as part of operating income. The most common non-operating assets are minority holdings in other companies (which are not consoldiated). You can find the book value of these holdings on the balance sheet, but see if you can convert to market value. (I apply a price to book ratio, based on the sector that the company is in to the book value).

B17

Aswath Damodaran: Enter the "market" value of minority interests. This is a uniquely accounting item and will be on the liability side of your company's balance sheet. It reflects the requirement that if you own more than 50% of another company or have effective control of it, you have to consolidate that company's statements with yours. Thus, you count 100% of that subsidiaries assets, revenues and operating income with your company, even if you own only 60%. The minority interest reflects the book value of the 40% of the equity in the subsidiary that does not belong to you. Again, it is best if you can convert the book value to a market value by applying the price to book ratio for the sector in which the subsidiary operates

B18

Aswath Damodaran: Enter the most recent update you have on the number of shares. If you have different classes of shares, aggregate them all and enter one number. Count restricted stock units (RSUs) as shares but don't count shares underlying employee options.

B20

Aswath Damodaran: Enter the most recent stock price (how about today's?) in here.

B21

Aswath Damodaran: Enter your effective (not marginal) tax rate for your firm. You will find this in your company's annual report. If you cannot, you can compute it as follows, from the income statement: Effective tax rate = Taxes paid/ Taxable income If your effective tax rate varies across years, you can use an average.

B22

Aswath Damodaran: This is a statutory tax rate. I use the tax rate of the country the company is domiciled in. See worksheet embedded in this spreadshseet for country tax rates.

B24

Aswath Damodaran: I don't have a crystal ball but you should look at a. Revenue growth in your company in recent years b. Your company's revenues, relative to the overall market size and larger players in the sector. Suggestion: Check your revenues in year 10 against the overall market and see what market share are you giving your company. Check your company's revenues against other companies in the sector. Note that this number can be negative for a declining firm.

B25

Aswath Damodaran: You should start by looking at your company's current pre-tax operating margin but also look at the average for your industry. (You can check my estimates of industry averages in the last worksheet on this spreadsheet.)

B26

Aswath Damodaran: You are probably wondering what this is but it is how I compute how much you are going to reinvest to keep your business growing in future years. The higher you set this number, the more efficiently you are growing and the higher the value of your growth. Again, look at your company's current number (divide cell B3 by the sum of cells B5 and B6). Look at the industry averages as well in the worksheet.

B28

Aswath Damodaran: This should be today's long term riskfree rate. If you are working with a currency where the government has default risk, clean up the government bond rate to make it riskfree (by subtracting the default spread for the government).

B29

Aswath Damodaran: Enter the current cost of capital for your firm. If you don't know what it is, you can use the worksheet to compute it.

B32

Aswath Damodaran: Check your company's annual report or 10K. If it does have options outstanding, enter the total number here (vested and non vested, in the money and out…)

B33

Aswath Damodaran: Enter the weighted average strike price of your options. (Should be in your 10K or annual report.)

B34

Aswath Damodaran: The weighted average maturity of your options should be reported in your financial statements.

B35

Aswath Damodaran: If you have a standard deviation for your stock, enter that number. If not, use the industry average standard deviation from the worksheet.

B39

Aswath Damodaran: Mature companies tend to have costs of capital closer to the market average. While the riskfree rate + 4.5% is a close approximation of the average, you can use a slightly higher number (riskfree rate + 6%) for mature companies in riskier businesses and a slightly lower number (risfree rate + 4%) for safer companies.

B42

Aswath Damodaran: The default assumption is that competitive advantages will fade to zero over time. While this is a good assumption for many firms (about 7 in 10), there are some firms with sustainable competitive advantages (brand name, for instance), where the excess returns may continue beyond year 10. If your firm is one of those, you can enter a return on capital higher than your cost of capital in the cell below. Just don't get carried away. At the maximum, the excess return should not exceed 5% for a mature firm.

B43

Aswath Damodaran: Even if you believe your firm has significant competitive advantages, don't set this number to more than 5% more than your cost of capital.

B45

Aswath Damodaran: Companies at either end of the life cycle - young, growth and old, declining firms have a significant likelihood of failure. While we tend to ignore this in conventional DCF, it is worth thinking about whether you want to estimate a probability of failure. It is not easy to do but it can be done by looking at either history (with young, growth companies) or the debt market (with distressed companies).

B46

Aswath Damodaran If you want to look at ways of estimating this probability, try these papers I have on the topic: For young growth companies: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1418687 For declining, distressed companies: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1428022

B47

Aswath Damodaran: If the firm fail and has to liquidate its assets, you need to specify what the liquidation proceeds will be tied to. For young growth companies, I would tie it to value and with distressed firms (especially ones with significant assets in place), I would use book value.

B48

Aswath Damodaran: You will generally not get 100% of fair value. How much less than 100% you get will depend on whether there are lots of potential buyers for your assets and how much of a hurry you are in to liquidate. It may well be zero for a young growth company with no tangible assets.

B50

Aswath Damodaran: Companies generally pay less than the marginal tax rate on their income. Some of that is due to tax deferral and others to quirks in the tax law. Over time, the conservative assumption is to require the tax rate to move towards the marginal tax rate. However, if you believe that your firm's tax benefits are permanent, you can override this assumption.

B52

Aswath Damodaran: If your company has been losing money for a while, there will be accumulated losses from prior periods. Check your financial statements.

B53

Aswath Damodaran: This is the NOL from prior years carried forward into this year.

There should be a check against the iteration box. If there is not, you will get circular reasoning errors.Numbers from your base year below ( in consistent units)

Alibaba gets about 90% of its revenues in China and 10% internationally. The ERP I use reflects that mixThe bulk of Alibaba's revenues still come from advertising, though it is building other revenue sourcesYear ended 3/31/13

Updated to reflect filing in August 2014 (and first quarter results for April -June 2014Updated to reflect filing in August 2014 (and first quarter results for April -June 2014Updated to reflect filing in August 2014 (and first quarter results for April -June 2014Updated to reflect filing in August 2014 (and first quarter results for April -June 2014Updated to reflect filing in August 2014 (and first quarter results for April -June 2014

Am assuming product development expenses are R&D, with 2-year life Minimal, but took lease expenses for years 2-5 and averaged to get annual lease

From prospectus: Cash + Short term investmentsInvestments in Weibo, UCWeb,Autonavi, Cainiaio (from balance sheet). Marked Weibo and AutoNavi to market price. Added $3 billion for Alipay liquidity provision, entitling Alibaba to 37.5% of value (if a liquidity event occurs)

Shares outstanding + RSUs. Prospectus (Aug 2014)News stories, not confirmed yet Computed numbers: Here is what your company's numbers look like, relative to industry.No offering price yet (estimate based on $150 bilIf you are not working in US dollars, you should add the inflation differential to the industry averages.Effective tax rate (Last fiscal year)China statutory rate Revenue growth in the most recent year =

Pre-tax operating margin in the most recent year =China online retail growth Sales to capital ratio in most recent year =Competition is picking up Return on invested capital in most recent year=More reinvestment in both internal projects Standard deviation in stock prices =and acquisitions. Cost of capital =Valuation is done in US dollarsCost of capital reflects business mix (advertising + online) and geographic exposure (90.3% in China, 9.7% rest of the world)See cost of capital worksheet

Prospectus.Average exercise price from prospectus (Page 300)Average maturity from prospectus (Page 300)Using standard deviation in online companies listed in the US

In stable growth, I will assume that your firm will have a cost of capital similar to that of typical mature companies (riskfree rate + 4.5%)

Slight drop in cost of capital as company becomes matureI will assume that your firm will earn a return on capital equal to its cost of capital after year 10. I am assuming that whatever competitive advantages you have today will fade over time.

In steady state, this will be a tough business to generate excess returns in, even with network effects.

Already profitable, plenty of cash.

I will assume that your effective tax rate will adjust to your marginal tax rate by your terminal year. If you override this assumption, I will leave the tax rate at your effective tax rate.Tax credits will disappear over time.

I will assume that you have no losses carried forward from prior years ( NOL) coming into the valuation. If you have a money losing company, you may want to override tis.

Important: Before you run this spreadsheet, go into preferences in Excel and check under Calculation options

There should be a check against the iteration box. If there is not, you will get circular reasoning errors.

Alibaba gets about 90% of its revenues in China and 10% internationally. The ERP I use reflects that mix

Investments in Weibo, UCWeb,Autonavi, Cainiaio (from balance sheet). Marked Weibo and AutoNavi to market price. Added $3 billion for Alipay liquidity provision, entitling Alibaba to 37.5% of value (if a liquidity event occurs)

Computed numbers: Here is what your company's numbers look like, relative to industry.If you are not working in US dollars, you should add the inflation differential to the industry averages.

Company Industry (USIndustry (Global data)92.24% 4.60% 159.82%50.73% 11.44% 9.24%

1.03 1.3945714 3.8796.72% 11.59% 29.68%

83.02%7.90%

Cost of capital reflects business mix (advertising + online) and geographic exposure (90.3% in China, 9.7% rest of the world)

I will assume that your firm will earn a return on capital equal to its cost of capital after year 10. I am assuming that whatever competitive advantages you have today will fade over time.

I will assume that your effective tax rate will adjust to your marginal tax rate by your terminal year. If you override this assumption, I will leave the tax rate at your effective tax rate.

Before you run this spreadsheet, go into preferences in Excel and check under Calculation options

Investments in Weibo, UCWeb,Autonavi, Cainiaio (from balance sheet). Marked Weibo and AutoNavi to market price. Added $3 billion for Alipay liquidity provision, entitling Alibaba to 37.5% of value (if a liquidity event occurs)

Base year 1 2 3Revenue growth rate 25.00% 25.00% 25.00%Revenues $ 9,268.00 $ 11,585.00 $ 14,481.25 $ 18,101.56 EBIT (Operating) margin 50.73% 49.66% 48.58% 47.51%EBIT (Operating income) $ 4,701.61 $ 5,752.71 $ 7,035.52 $ 8,600.17 Tax rate 11.92% 11.92% 11.92% 11.92%EBIT(1-t) $ 4,141.12 $ 5,066.92 $ 6,196.79 $ 7,574.92 - Reinvestment $ 1,158.50 $ 1,448.13 $ 1,810.16 FCFF $ 3,908.42 $ 4,748.67 $ 5,764.77 NOL $ - $ - $ - $ -

Cost of capital 8.56% 8.56% 8.56%Cumulated discount factor 0.9211 0.8485 0.7816PV(FCFF) $ 3,600.21 $ 4,029.27 $ 4,505.71

Terminal cash flow $ 10,352.98 Terminal cost of capital 8.00%Terminal value $ 185,205.28 PV(Terminal value) $ 82,730.74 PV (CF over next 10 years $ 54,659.64 Sum of PV $ 137,390.38 Probability of failure = 0.00%Proceeds if firm fails = $68,695.19Value of operating assets = $ 137,390.38 - Debt $ 10,068.28 - Minority interests $ - + Cash $ 9,330.00 + IPO Proceeds $ 20,000.00 + Non-operating assets $ 5,087.00 Value of equity $ 161,739.11 - Value of options $695.86 Value of equity in common $ 161,043.25 Number of shares 2,440.91 Estimated value /share $ 65.98 Price $ 65.00 Price as % of value 98.52%

Implied variablesSales to capital ratio 2.00 2.00 2.00Invested capital $ 10,298 $ 11,457 $ 12,905 $ 14,715 ROIC 40.21% 44.23% 48.02% 51.48%

4 5 6 7 8 925.00% 25.00% 20.48% 15.96% 11.45% 6.93%

$ 22,626.95 $ 28,283.69 $ 34,076.76 $ 39,516.77 $ 44,039.86 $ 47,090.94 46.44% 45.36% 44.29% 43.22% 42.15% 41.07%

$ 10,507.44 $ 12,830.83 $ 15,093.21 $ 17,078.70 $ 18,561.00 $ 19,341.64 11.92% 11.92% 14.54% 17.15% 19.77% 22.38%

$ 9,254.82 $ 11,301.23 $ 12,899.11 $ 14,149.23 $ 14,891.76 $ 15,012.16 $ 2,262.70 $ 2,828.37 $ 2,896.53 $ 2,720.01 $ 2,261.54 $ 1,525.54 $ 6,992.12 $ 8,472.86 $ 10,002.57 $ 11,429.22 $ 12,630.22 $ 13,486.62 $ - $ - $ - $ - $ - $ -

8.56% 8.56% 8.45% 8.34% 8.22% 8.11%0.7200 0.6632 0.6115 0.5645 0.5216 0.4824

$ 5,034.05 $ 5,619.08 $ 6,116.78 $ 6,451.39 $ 6,587.53 $ 6,506.39

2.00 2.00 2.00 2.00 2.00 2.00 $ 16,978 $ 19,806 $ 22,703 $ 25,423 $ 27,684 $ 29,210

54.51% 57.06% 56.82% 55.66% 53.79% 51.39%

10 Terminal year2.41% 2.41%

$ 48,225.83 $ 49,388.08 40.00% 40.00%

$ 19,290.33 $ 19,755.23 $ 15,053.62

25.00% 25.00% $ 14,467.75 $ 14,816.42 $ 567.45 $ 4,463.45 $ 23,942.36

$ 13,900.30 $ 10,352.98 $ - $ -

8.00% 8.00%0.4467

$ 6,209.23

0.30125

After year 102.00

$ 29,777 48.59% 8.00%

Check these revenues againsta. Overall market sizeb. Largest companies in this market

Compare this return on capital in year 10 againsta. the industry average(column E of worksheet)b. the return on capital after year 10If it is too high (low), you may want to lower (raise) your sales to capital ratio

This is how much capital you invested over the ten year period.

This is is how much your operating income grew over the ten-year period.

Valuing Options or WarrantsEnter the current stock price = $ 65.00 Enter the strike price on the option = $ 14.29 Enter the expiration of the option = 4.20Enter the standard deviation in stock prices = 37.20% (volatility)Enter the annualized dividend yield on stock = 0.00%Enter the treasury bond rate = 2.41%Enter the number of warrants (options) outstan 13.35Enter the number of shares outstanding = 2,440.91

Do not input any numbers below this lineVALUING WARRANTS WHEN THERE IS DILUTIONStock Price= 65 # Warrants issued= 13.345Strike Price= 14.29 # Shares outstanding= 2,441Adjusted S = 64.930094548 T.Bond rate= 2.41%Adjusted K = 14.29 Variance= 0.1384Expiration (in years) = 4.2 Annualized dividend yield= 0.00%

Div. Adj. interest rate= 2.41%

d1 = 2.499534071N (d1) = 0.993782163

d2 = 1.737160934N (d2) = 0.9588206158

Value per option = $ 52.14 Value of all options outstanding = $695.86

VALUATION DIAGNOSTICSInvested capital at start of valuationInvested capital at end of valuationChange in invested capital over 10 yearsChange in EBIT*(1–t) (after-tax operating income) over 10 yearsMarginal ROIC over 10 yearsROIC at end of valuationAverage WACC over the 10 years (compounded)Your calculated value as a percent of current price

InputsRevenue growth rate (input cell B3)Last period EBIT as % of revenue (Input cell B14)Sales to Capital Ratio or reinvestment (Input cell B15)Return on capital in perpetuity (B30 & B31)

$ 10,298.30 $ 29,777.22 $ 19,478.92 $ 14,588.72

74.89%48.59%

8.39%101.50%

If calculated value is negative or looks too low

Increase revenue growth rateIncrease the target pre-tax operating marginDecrease the sales/capital ratioIncrease relative to your cost of capital

If calculated value looks too high

Decrease revenue growth rateDecrease the target pre-tax operating margin Increase the sales/capital ratio If higher than your cost of capital, lower towards your cost of capital T

R & D ConverterThis spreadsheet converts R&D expenses from operating to capital expenses. It makes the appropriate adjustments to operating income, netincome, the book value of assets and the book value of equity.

InputsOver how many years do you want to amortize R&D expenses 2 ! If in doubt, use the lookup table belowEnter the current year's R&D expense = $ 971.90 The maximum allowed is ten yearsEnter R& D expenses for past years: the number of years that you will need to enter will be determined by the amortization periodDo not input numbers in the first column (Year). It will get automatically updated based on the input above.

Year R& D Expenses-1 610.24 ! Year -1 is the year prior to the current year-2 471.06 ! Year -2 is the two years prior to the current year00000000

OutputYear R&D Expense Unamortized portion Amortization this year

Current 971.90 1.00 971.90-1 610.24 0.50 305.12 $ 305.12 -2 471.06 0.00 0.00 $ 235.53 0 0.00 0.00 0.00 $ - 0 0.00 0.00 0.00 $ - 0 0.00 0.00 0.00 $ - 0 0.00 0.00 0.00 $ - 0 0.00 0.00 0.00 $ - 0 0.00 0.00 0.00 $ - 0 0.00 0.00 0.00 $ -

0 0.00 0.00 0.00 $ -

Value of Research Asset = $1,277.03 $ 540.65

Amortization of asset for current year = $540.65

Adjustment to Operating Income = $431.25 ! A positive number indicates an increase in operating income (add to reported EBIT)Tax Effect of R&D Expensing $108

D40

Aswath Damodaran: By expensing R&D rather than capitalizing it, the firm gets a tax benefit. This is the dollar value of that tax benefit.

R & D ConverterThis spreadsheet converts R&D expenses from operating to capital expenses. It makes the appropriate adjustments to operating income, net

! If in doubt, use the lookup table belowThe maximum allowed is ten years

Enter R& D expenses for past years: the number of years that you will need to enter will be determined by the amortization period

! A positive number indicates an increase in operating income (add to reported EBIT)

Operating Lease ConverterThe yellow cells are input cells. Please enter them.

InputsOperating lease expense in current year = $ 35.28 Operating Lease Commitments (From footnote to financials)

Year Commitment ! Year 1 is next year, ….1 $32.202 $6.963 $6.964 $6.965 $6.96

6 and beyond $1.30

OutputPre-tax Cost of Debt = 4.00% ! If you do not have a cost of debt, use the synthetic rating estimator

Number of years embedded in yr 6 estimate = 0 ! I use the average lease expense over the first five yearsto estimate the number of years of expenses in yr 6

Converting Operating Leases into debtYear Commitment Present Value

1 $ 32.20 $ 30.96 2 $ 6.96 $ 6.43 3 $ 6.96 $ 6.19 4 $ 6.96 $ 5.95 5 $ 6.96 $ 5.72

6 and beyond $ 1.30 $ 1.03 ! Commitment beyond year 6 converted into an annuity for ten yearsDebt Value of leases = $ 56.28

Restated FinancialsDepreciation on Operating Lease Asset = $ 11.26 ! I use straight line depreciationAdjustment to Operating Earnings = $24.03 ! Add this amount to pre-tax operating incomeAdjustment to Total Debt outstanding = $ 56.28 ! Add this amount to debtAdjustment to Depreciation = $11.26

Operating Lease ConverterThe yellow cells are input cells. Please enter them.

! If you do not have a cost of debt, use the synthetic rating estimator

! I use the average lease expense over the first five yearsto estimate the number of years of expenses in yr 6

! Commitment beyond year 6 converted into an annuity for ten years

! I use straight line depreciation! Add this amount to pre-tax operating income! Add this amount to debt

Estimation of Current Cost of CapitalInputs

Equity

Number of Shares outstanding = 2440.91

Current Market Price per share = $ 65.00

Approach for estimating beta Multibusiness(Global)

If direct input, enter levered beta (or regression beta) 1.20

Unlevered beta = 1.04

Riskfree Rate = 2.41%

What approach do you want to use to input ERP? Operating countries

Direct input for ERP (if you choose "will input" 5.75%

Equity Risk Premium used in cost of equity = 5.94%

Debt

Book Value of Straight Debt = $ 10,012.00

Interest Expense on Debt = $ 245.75

Average Maturity = 3

Approach for estimating pre-tax cost of debt Direct input

If direct input, input the pre-tax cost of debt 3.500%

If actual rating, input the rating Baa2/BBB

If synethetic rating, input the type of company 1

Pre-tax Cost of Debt = 4.00%

Tax Rate = 25%

Book Value of Convertible Debt = 0

Interest Expense on Convertible = 0

Maturity of Convertible Bond = 0

Market Value of Convertible = 0

Debt value of operating leases = $ 56.28

Preferred Stock

Number of Preferred Shares = 0

Current Market Price per Share= 70

Annual Dividend per Share = 5

Output

Estimating Market Value of Straight Debt = $ 9,582.61

Estimated Value of Straight Debt in Convertible = $ -

Value of Debt in Operating leases = $ 56.28 Estimated Value of Equity in Convertible = $ - Levered Beta for equity = 1.092

B9

Aswath Damodaran: Use a sector average beta, if need be.

B11

Aswath Damodaran: If you pick operating regions or countries, please input the revenues by country or region in the table to the right.

B13

Aswath Damodaran: If your company has risk exposure in emergiing markets, incorporate that risk premiums here. See worksheet on country risk premiums.

B17

Aswath Damodaran: Interest expense (gross) from most recent financial statement.

B18

Aswath Damodaran: Generally found in footnotes to financial statements.

B22

Aswath Damodaran: 1: Large market cap (>$5 billion) and safe. 2: Small market cap (<$5 billion) or risky. If company has volatile earnings or is in risky business, use 2, even if large market cap.

B23

Aswath Damodaran: Current, long term cost of borrowing money. If you have a rating use it, if not use a synthetic rating. See the worksheet attached.

Equity Debt Preferred StockMarket Value $ 158,659.15 $ 9,638.88 $ -

Weight in Cost of Capital 94.27% 5.73% 0.00%

Cost of Component 8.90% 3.00% 7.14%

Operating Countries ERP calculatorCountry Revenues ERP Weight

China 7275 5.90% 90.29%

Global 782 6.35% 9.71%

0.00% 0.00%

0.00% 0.00%

0.00% 0.00%

0.00% 0.00%

0.00% 0.00%

0.00% 0.00%

0.00% 0.00%

0.00% 0.00%

0.00% 0.00%

Total 8057 100.00%

Operating Regions ERP calculatorRegion Revenues ERP Weight

Africa 10.04% 0.00%

Asia 3482 6.51% 37.20%

Australia & New Zealand 5.00% 0.00%

Caribbean 12.65% 0.00%

Central and South America 385 8.62% 4.11%

Eastern Europe & Russia 7.96% 0.00%

Global 6.35% 0.00%

Middle East 4680 6.14% 49.99%

North America 814 5.00% 8.70%

Total 9361 100.00%

Multi Business (US Industry Averages)Business Revenues EV/Sales Estimated Valu

Advertising $ 70.00 1.6748 $ 117.24

Internet $ 30.00 5.5678 $ 167.03

0.0000 $ -

0.0000 $ -

0.0000 $ -

0.0000 $ -

0.0000 $ -

0.0000 $ -

0.0000 $ -

0.0000 $ -

0.0000 $ - 0.0000 $ -

Company $ 100.00 $ 284.27

Capital Multi Business (Global Industry Averages) $ 168,298.03 Business Revenues EV/Sales Estimated Valu

100.00% Advertising $ 70.00 1.5982 $ 111.87

8.56% Retail (Internet) $ 30.00 3.1883 $ 95.65 0.0000 $ - 0.0000 $ - 0.0000 $ - 0.0000 $ - 0.0000 $ - 0.0000 $ - 0.0000 $ - 0.0000 $ - 0.0000 $ - 0.0000 $ -

Company $ 100.00 $ 207.52

Weighted ERP

5.33%

0.62%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

0.00%

5.94%

Weighted ERP

0.0000%

2.4198%

0.0000%

0.0000%

0.3546%

0.0000%

0.0000%

3.0716%

0.4348%

6.2808%

Unlevered Beta

1.1259

1.0235

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

0.0000

0.00000.0000

1.0657

Unlevered Beta

0.8911

1.22310.00000.00000.00000.00000.00000.00000.00000.00000.00000.0000

1.0441

Inputs for synthetic rating estimationPlease read the special cases worksheet (see below) before you use this spreadsheet.Before you use this spreadsheet, make sure that the iteration box (under calculation options in excel) is checked.Enter the type of firm = 1

Enter current Earnings before interest and taxes (EBIT) = $ 4,270.36 (Add back only long term interest expense for financial firms)

Enter current interest expenses = $248.00 (Use only long term interest expense for financial firms)

Enter long term risk free rate = 2.41%

Output

Interest coverage ratio = 17.22

Estimated Bond Rating = Aaa/AAA Note: If you get REF! All over the place, set the operating lease commitment question in cell F5Estimated Company Default Spread = 0.40% to No, and then reset it to Yes. It should work.Estimated County Default Spread (if any) = 0.60%Estimated Cost of Debt = 3.41%

If you want to update the spreads listed below, please visit http://www.bondsonline.comFor large manufacturing firms

If interest coverage ratio is> ≤ to Rating is Spread is

-100000 0.199999 D2/D 12.00%

0.2 0.649999 Caa/CCC 10.50%

0.65 0.799999 Ca2/CC 9.50%

0.8 1.249999 C2/C 8.75%

1.25 1.499999 B3/B- 7.25%

1.5 1.749999 B2/B 6.50%

1.75 1.999999 B1/B+ 5.50%

2 2.2499999 Ba2/BB 4.00%

2.25 2.49999 Ba1/BB+ 3.00%

2.5 2.999999 Baa2/BBB 2.00%

3 4.249999 A3/A- 1.30%

4.25 5.499999 A2/A 1.00%

5.5 6.499999 A1/A+ 0.85%

6.5 8.499999 Aa2/AA 0.70%

8.50 100000 Aaa/AAA 0.40%

For smaller and riskier firmsIf interest coverage ratio isgreater than ≤ to Rating is Spread is

-100000 0.499999 D2/D 12.00% Rating is

0.5 0.799999 Caa/CCC 10.50% A1/A+0.8 1.249999 Ca2/CC 9.50% A2/A1.25 1.499999 C2/C 8.75% A3/A-1.5 1.999999 B3/B- 7.25% Aa2/AA2 2.499999 B2/B 6.50% Aaa/AAA

2.5 2.999999 B1/B+ 5.50% B1/B+3 3.499999 Ba2/BB 4.00% B2/B

3.5 3.9999999 Ba1/BB+ 3.00% B3/B-

F5

Aswath Damodaran: If your most recent year's operating income is unusually low or high, you can use the average operating income from the last few years.

F6

Aswath Damodaran: Enter the interest expense from the most recent income statement.

F7

Aswath Damodaran: I use a 10 year government bond rate.

4 4.499999 Baa2/BBB 2.00% Ba1/BB+4.5 5.999999 A3/A- 1.30% Ba2/BB6 7.499999 A2/A 1.00% Baa2/BBB

7.5 9.499999 A1/A+ 0.85% Caa/CCC9.5 12.499999 Aa2/AA 0.70% Ca2/CC12.5 100000 Aaa/AAA 0.40% C2/C

D2/D

Please read the special cases worksheet (see below) before you use this spreadsheet.Before you use this spreadsheet, make sure that the iteration box (under calculation options in excel) is checked.

(Add back only long term interest expense for financial firms)

(Use only long term interest expense for financial firms)

Note: If you get REF! All over the place, set the operating lease commitment question in cell F5to No, and then reset it to Yes. It should work.

Spread is

0.85%

1.00%

1.30%

0.70%

0.40%

5.50%

6.50%

7.25%

3.00%

4.00%

2.00%

8.75%

9.50%

10.50%

12.00%

Industry Name Number of firmsAnnual Average Revenue growth - Last 5 yearsPre-tax Operating MarginAdvertising 31 4.60% 11.44%Aerospace/Defense 66 12.33% 9.99%Air Transport 35 6.51% 8.04%Apparel 46 7.48% 10.70%Auto Parts 54 0.90% 6.88%Automotive 11 9.66% 6.55%Bank 375 0.00% NABank (Midwest) 86 0.00% NABeverage 36 3.24% 20.46%Biotechnology 232 23.92% 22.27%Building Materials 42 4.86% 0.55%Cable TV 18 8.74% 19.14%Chemical (Basic) 18 -6.24% 14.15%Chemical (Diversified) 32 9.02% 15.73%Chemical (Specialty) 73 11.69% 11.66%Coal 19 5.79% 10.20%Computer Software 181 10.34% 26.93%Computers/Peripherals 68 -0.77% 15.88%Diversified Co. 123 11.32% 13.18%Drug 199 23.48% 25.65%E-Commerce 66 13.83% 12.17%Educational Services 33 3.59% 12.70%Electric Util. (Central) 20 -2.25% 18.58%Electric Utility (East) 17 -9.80% 20.00%Electric Utility (West) 15 -5.02% 16.88%Electrical Equipment 60 -2.61% 6.74%Electronics 99 5.20% 5.97%Engineering & Const 30 13.10% 5.19%Entertainment 67 9.03% 21.64%Entertainment Tech 36 5.45% 14.84%Environmental 61 16.24% 14.23%Financial Svcs. (Div.) 225 19.02% 48.76%Food Processing 104 6.58% 9.23%Foreign Electronics 10 -9.48% 4.56%Funeral Services 6 6.73% 14.72%Furn/Home Furnishing 28 2.97% 6.84%Healthcare Informatio 19 7.12% 13.68%Heavy Truck & Equip 21 3.93% 10.87%Homebuilding 25 14.61% -17.62%Hotel/Gaming 53 15.36% 15.20%Household Products 26 7.33% 16.93%Human Resources 25 7.68% 3.15%Industrial Services 122 6.30% 10.23%Information Services 29 10.26% 19.64%Insurance (Life) 31 0.00% NAInsurance (Prop/Cas.) 66 4.96% NAInternet 145 18.48% 14.24%Investment Co. 16 32.20% 32.79%IT Services 55 3.33% 13.66%

Machinery 82 3.47% 12.51%Maritime 51 -7.04% 10.84%Med Supp Invasive 74 1.14% 23.03%Med Supp Non-Invasiv 127 11.25% 7.77%Medical Services 106 8.35% 10.56%Metal Fabricating 25 0.74% 13.69%Metals & Mining (Div.) 71 2.64% 24.25%Natural Gas (Div.) 30 -4.25% 18.59%Natural Gas Utility 26 -7.97% 11.95%Newspaper 12 2.29% 13.30%Office Equip/Supplies 18 0.49% 6.97%Oil/Gas Distribution 11 -2.80% 12.54%Oilfield Svcs/Equip. 80 14.20% 16.01%Packaging & Container 26 2.70% 9.62%Paper/Forest Products 29 5.05% 8.71%Petroleum (Integrated) 28 20.39% 10.63%Petroleum (Producing) 168 7.01% 24.23%Pharmacy Services 16 13.34% 4.76%Pipeline MLPs 62 -1.75% 8.65%Power 92 -2.13% 7.75%Precious Metals 74 14.61% 31.98%Precision Instrument 76 -3.49% 16.03%Public/Private Equity 20 14.68% 33.10%Publishing 21 -3.12% 8.10%R.E.I.T. 131 -5.51% 80.18%Railroad 13 12.09% 29.50%Recreation 53 10.80% 12.22%Reinsurance 12 0.00% NARestaurant 67 1.40% 16.31%Retail (Hardlines) 69 10.42% 8.70%Retail (Softlines) 41 7.33% 10.85%Retail Automotive 19 11.71% 6.83%Retail Building Supply 10 8.37% 9.34%Retail Store 36 8.73% 5.53%Retail/Wholesale Food 32 10.91% 3.78%Securities Brokerage 30 -4.90% 32.05%Semiconductor 136 -4.41% 18.28%Semiconductor Equip 10 2.12% 10.34%Shoe 12 5.03% 11.18%Steel 32 1.11% 2.99%Telecom. Equipment 91 1.39% -0.15%Telecom. Services 61 6.10% 19.86%Telecom. Utility 24 0.01% 15.94%Thrift 170 0.00% NATobacco 11 20.51% 23.01%Toiletries/Cosmetics 15 4.78% 10.51%Trucking 31 1.26% 7.85%Water Utility 9 4.44% 27.63%Wireless Networking 53 11.83% 7.57%

After-tax ROC Average effective tax rate Unlevered Beta Equity (Levered) Beta Cost of equity11.59% 16.81% 1.13 1.30 9.54%18.08% 23.03% 0.87 0.92 7.62%16.80% 26.03% 0.92 1.07 8.37%14.62% 18.85% 1.17 1.20 9.06%14.06% 17.88% 1.50 1.66 11.35%6.10% 17.79% 1.14 1.70 11.52%

NA 17.91% 0.62 0.88 7.45%NA 21.88% 0.86 0.95 7.80%

13.87% 17.04% 0.71 0.81 7.08%16.57% 2.63% 1.27 1.24 9.22%-0.38% 11.27% 1.28 1.69 11.50%11.44% 20.75% 0.71 0.96 7.83%15.30% 21.56% 1.20 1.32 9.63%15.21% 21.15% 1.24 1.32 9.62%14.17% 15.52% 1.03 1.13 8.71%7.65% 9.47% 0.89 1.44 10.26%25.52% 13.43% 0.90 0.85 7.28%29.07% 7.63% 1.29 1.28 9.45%8.83% 20.27% 0.88 1.15 8.79%16.78% 5.89% 0.99 1.04 8.25%9.11% 10.24% 0.82 0.82 7.13%25.71% 21.44% 0.85 0.78 6.93%6.29% 28.85% 0.35 0.55 5.77%5.45% 31.06% 0.26 0.39 4.99%6.45% 28.24% 0.37 0.54 5.76%4.41% 16.78% 1.34 1.35 9.77%12.06% 11.65% 1.10 1.14 8.74%13.83% 19.88% 1.15 1.10 8.56%11.79% 14.87% 1.18 1.33 9.71%14.97% 11.45% 1.33 1.06 8.35%7.15% 10.82% 0.34 0.45 5.31%11.19% 16.74% 0.95 1.19 8.98%12.40% 21.85% 0.76 0.85 7.29%6.75% 31.10% 1.15 1.11 8.57%8.41% 27.80% 0.81 1.01 8.11%10.10% 19.54% 1.33 1.39 10.01%10.00% 18.01% 1.08 1.07 8.37%15.04% 20.13% 1.46 1.79 12.01%-17.93% 7.09% 1.40 1.79 11.98%10.23% 14.48% 1.14 1.49 10.47%14.72% 23.88% 0.86 0.94 7.75%11.69% 25.63% 1.50 1.47 10.40%7.45% 20.04% 0.68 0.93 7.68%12.07% 17.00% 1.02 1.14 8.73%

NA 20.49% 1.66 1.62 11.14%NA 12.62% 0.81 0.81 7.09%

25.22% 11.27% 1.02 0.95 7.77%93.10% 21.82% 1.47 1.19 9.01%28.42% 18.61% 0.94 0.90 7.56%

11.76% 24.47% 1.09 1.19 8.99%3.33% 5.99% 0.71 1.48 10.46%16.28% 15.02% 0.92 0.97 7.87%19.25% 11.14% 0.87 0.88 7.45%13.73% 18.76% 0.73 0.91 7.60%13.72% 16.65% 1.31 1.41 10.07%13.22% 11.84% 1.22 1.39 9.98%5.47% 19.04% 1.04 1.29 9.51%6.31% 25.74% 0.40 0.56 5.83%12.66% 29.11% 1.90 2.01 13.08%10.97% 22.90% 0.94 1.14 8.72%6.46% 17.33% 0.67 1.01 8.11%9.70% 19.53% 1.29 1.47 10.37%11.37% 23.58% 0.87 1.09 8.48%8.49% 12.27% 0.93 1.17 8.91%12.64% 30.70% 1.01 1.07 8.38%11.54% 13.09% 1.23 1.48 10.42%8.27% 23.64% 0.90 1.00 8.05%7.70% 5.50% 0.41 0.56 5.85%3.17% 8.99% 0.73 1.50 10.53%8.98% 10.50% 0.73 0.83 7.19%13.41% 13.41% 1.08 1.12 8.65%13.90% 20.12% 1.58 1.67 11.40%8.55% 23.36% 0.92 1.13 8.70%12.59% 0.50% 0.98 1.35 9.77%12.36% 30.96% 1.24 1.40 10.03%9.17% 20.89% 1.15 1.37 9.87%

NA 6.53% 0.90 0.81 7.08%19.44% 22.49% 0.94 1.00 8.04%14.89% 23.83% 1.60 1.68 11.44%35.44% 26.53% 1.33 1.27 9.41%9.54% 32.89% 1.04 1.27 9.40%16.18% 24.71% 1.10 1.17 8.90%13.70% 23.46% 1.05 1.18 8.95%11.65% 29.85% 0.68 0.78 6.95%5.43% 24.32% 0.80 1.18 8.95%18.03% 11.02% 1.44 1.38 9.93%9.54% 20.20% 1.88 1.73 11.71%26.04% 23.43% 1.39 1.31 9.61%2.14% 26.96% 1.22 1.66 11.36%-6.38% 17.41% 1.27 1.05 8.27%12.19% 17.82% 0.90 1.05 8.30%9.15% 19.76% 0.47 0.77 6.87%

NA 16.03% 0.79 0.69 6.51%33.57% 33.51% 0.81 0.88 7.45%17.09% 29.96% 0.97 1.03 8.18%12.48% 27.33% 1.19 1.40 10.05%6.15% 34.28% 0.31 0.45 5.27%4.09% 11.06% 0.93 1.18 8.96%

Std deviation in stock pricesPre-tax cost of debt Market Debt/Capital Cost of capital Sales/Capital EV/Sales83.02% 5.54% 26.35% 7.90% 1.39 1.6744.75% 4.04% 16.46% 6.77% 2.67 1.3163.96% 4.54% 30.31% 6.66% 2.72 1.0167.00% 5.04% 8.57% 8.54% 1.92 2.0851.50% 4.54% 18.11% 9.78% 2.53 0.9349.51% 4.04% 46.62% 7.28% 1.32 0.9843.18% 4.04% 45.74% 5.15% NA NA32.12% 4.04% 24.39% 6.49% NA NA47.98% 4.04% 18.12% 6.24% 0.86 3.5983.67% 5.54% 11.16% 8.56% 0.93 8.1776.77% 5.04% 30.25% 8.94% 1.07 1.6437.32% 4.04% 35.25% 5.92% 0.86 2.6238.16% 4.04% 18.89% 8.27% 1.42 1.5944.72% 4.04% 14.84% 8.56% 1.38 2.0760.60% 4.54% 16.36% 7.73% 1.70 1.7146.07% 4.04% 43.67% 6.84% 0.87 1.4067.14% 5.04% 7.05% 6.98% 1.26 4.0977.26% 5.04% 7.89% 8.95% 2.45 1.6757.21% 4.54% 37.79% 6.50% 0.86 2.1884.78% 5.54% 11.62% 7.67% 0.82 4.0672.45% 5.04% 7.30% 6.83% 1.00 6.0181.04% 5.54% 12.53% 6.47% 3.30 1.0214.80% 3.54% 44.44% 4.15% 0.49 2.6113.08% 3.54% 44.17% 3.73% 0.40 3.0914.11% 3.54% 41.24% 4.26% 0.51 2.4667.15% 5.04% 10.49% 9.06% 1.46 1.9175.34% 5.04% 15.50% 7.85% 2.68 0.8356.11% 4.54% 10.59% 7.95% 3.76 0.6161.01% 4.54% 16.95% 8.52% 0.79 3.3149.47% 4.04% 6.01% 8.00% 1.27 1.9677.98% 5.04% 28.42% 4.66% 0.76 2.3654.62% 4.54% 35.09% 6.79% 0.32 5.4851.38% 4.54% 17.03% 6.52% 1.78 1.4029.83% 4.04% 24.76% 7.05% 2.23 0.5425.91% 4.04% 28.09% 6.51% 0.85 2.2445.61% 4.04% 12.04% 9.10% 1.94 1.3454.31% 4.54% 7.71% 7.93% 1.11 4.7439.16% 4.04% 29.49% 9.18% 1.95 1.1441.47% 4.04% 35.22% 8.61% 0.94 1.8458.46% 4.54% 30.65% 8.10% 0.81 3.1040.37% 4.04% 13.70% 7.02% 1.19 2.6550.44% 4.54% 8.33% 9.76% 6.09 0.5258.23% 4.54% 37.91% 5.80% 1.04 1.5655.92% 4.54% 16.06% 7.76% 0.83 4.0529.38% 4.04% 26.98% 8.79% NA NA27.38% 4.04% 17.91% 6.25% NA NA90.80% 6.04% 2.34% 7.67% 2.29 5.5766.00% 5.04% 5.35% 8.69% 3.59 3.0551.20% 4.54% 5.29% 7.31% 2.79 2.13

47.09% 4.04% 16.62% 7.90% 1.32 1.9275.61% 5.04% 57.16% 6.21% 0.36 2.9955.16% 4.54% 12.93% 7.20% 0.92 3.1362.14% 4.54% 9.09% 7.02% 3.35 1.1172.79% 5.04% 31.09% 6.18% 2.00 0.9257.52% 4.54% 15.91% 8.90% 1.44 1.7182.87% 5.54% 19.45% 8.68% 0.79 2.1743.11% 4.04% 26.18% 7.66% 0.40 4.0929.29% 4.04% 37.22% 4.56% 0.74 2.1242.63% 4.04% 16.94% 11.27% 1.31 2.1356.56% 4.54% 31.65% 6.82% 2.20 0.6637.38% 4.04% 39.32% 5.88% 0.66 2.4953.47% 4.54% 20.69% 8.79% 0.80 2.1644.69% 4.04% 28.58% 6.75% 1.62 1.2943.52% 4.04% 27.43% 7.13% 1.39 1.3247.09% 4.04% 17.47% 7.34% 2.04 0.6772.91% 5.04% 21.52% 8.83% 0.75 1.9455.91% 4.54% 15.78% 7.21% 2.73 0.7622.33% 3.54% 29.46% 4.75% 0.92 2.1288.17% 5.54% 57.27% 6.40% 0.61 1.7266.24% 5.04% 25.52% 6.13% 0.39 2.0357.51% 4.54% 13.23% 7.86% 1.00 2.6633.66% 4.04% 21.60% 9.46% 0.48 3.2154.21% 4.54% 26.84% 7.09% 1.53 1.4429.77% 4.04% 30.52% 7.53% 0.17 7.1332.21% 4.04% 17.33% 8.71% 0.64 3.9846.18% 4.04% 23.96% 8.08% 0.95 2.0320.86% 3.54% 13.79% 6.39% NA NA53.50% 4.54% 11.67% 7.42% 1.72 2.7152.44% 4.54% 11.18% 10.46% 2.55 1.8756.84% 4.54% 4.77% 9.09% 5.21 1.2736.44% 4.04% 28.17% 7.43% 2.17 1.0828.59% 4.04% 9.81% 8.27% 2.71 1.5140.98% 4.04% 18.54% 7.74% 3.68 0.6530.14% 4.04% 23.34% 5.90% 4.53 0.5443.92% 4.04% 63.94% 4.78% 0.27 4.3549.52% 4.04% 9.85% 9.19% 1.20 2.7836.82% 4.04% 11.65% 10.63% 1.19 2.0749.98% 4.04% 3.79% 9.34% 3.14 2.0639.65% 4.04% 38.89% 7.88% 1.15 0.8461.81% 4.54% 11.02% 7.66% 2.05 1.5962.49% 4.54% 25.17% 6.90% 0.92 2.0041.97% 4.04% 47.08% 4.77% 0.79 1.8634.84% 4.04% 8.01% 6.18% NA NA30.12% 4.04% 16.33% 6.63% 2.13 2.4138.40% 4.04% 15.71% 7.27% 2.57 1.7342.67% 4.04% 23.56% 8.26% 2.36 1.0614.75% 3.54% 40.25% 4.01% 0.33 4.3462.14% 4.54% 28.78% 7.17% 0.70 3.28

EV/EBITDA EV/EBIT Price/Book Trailing PE10.91 14.64 3.24 49.3710.54 13.08 4.58 24.327.89 12.56 5.00 16.16

15.70 19.42 4.60 21.979.56 13.48 2.90 23.268.76 15.02 1.59 12.655.40 5.40 1.21 18.145.43 5.43 1.59 18.57

14.36 17.56 4.79 28.9628.37 36.70 6.46 63.7126.98 298.53 2.42 755.508.03 13.68 5.24 25.958.37 11.25 2.76 14.55

10.11 13.16 3.47 22.1610.92 14.68 3.91 30.186.97 13.73 1.43 36.36

12.98 15.20 4.28 65.038.69 10.53 4.06 51.52

12.68 16.55 2.91 28.6811.84 15.82 3.85 49.1130.97 49.33 6.33 150.175.95 8.02 2.93 24.108.51 14.04 1.62 16.699.56 15.46 1.54 16.678.32 14.60 1.54 16.85

18.40 28.29 2.89 23.369.61 13.95 2.41 25.269.17 11.81 2.26 22.41

12.88 15.27 3.50 25.3610.01 13.18 1.92 20.1010.35 16.55 2.56 28.0610.58 11.24 2.36 26.6912.04 15.15 3.27 31.355.39 11.74 1.21 34.22

11.69 15.25 2.87 22.4014.07 19.64 2.95 22.3521.11 34.62 5.37 1058.248.23 10.51 3.58 19.88NA NA 2.25 25.56

13.81 20.37 5.45 37.9913.13 15.63 4.38 21.0213.14 16.57 3.20 26.3711.24 15.25 2.35 37.6314.48 20.62 5.10 214.351.51 1.51 1.03 14.72

299.00 301.42 1.36 17.6127.77 39.09 6.83 149.758.17 9.31 3.92 22.44

12.62 15.60 5.20 36.04

11.60 15.31 3.24 27.4112.20 27.61 1.20 33.5010.99 13.61 3.32 31.4211.73 14.28 3.92 42.857.18 8.72 2.55 28.019.92 12.49 2.88 19.536.71 8.96 1.93 94.268.25 22.00 2.00 51.23

11.43 17.75 2.30 17.9511.17 15.98 3.48 26.376.33 9.43 1.67 20.21

13.84 19.83 2.71 26.588.89 13.50 1.99 31.869.05 13.43 3.35 21.908.97 15.10 2.46 22.484.62 6.34 1.44 17.575.04 8.00 1.62 51.32

11.70 15.88 2.48 15.1416.96 24.45 3.18 40.989.78 22.23 1.11 206.854.55 6.34 0.77 18.03

12.13 16.62 2.96 32.158.95 9.70 1.62 23.33

10.62 17.80 3.52 18.787.71 8.89 1.26 19.03

10.43 13.48 3.60 21.7511.30 16.58 2.53 26.5337.10 37.10 0.92 10.5112.96 16.61 7.29 35.8215.81 21.50 6.80 24.229.12 11.69 5.72 23.20

12.73 15.83 4.47 20.0212.95 16.19 5.64 31.298.65 11.83 3.24 23.959.51 14.31 3.78 29.78

12.02 13.58 1.35 28.129.35 15.19 3.12 41.18

11.55 19.97 2.28 41.7615.75 18.40 5.11 21.0610.62 27.92 0.94 24.3742.19 NA 2.40 33.445.68 10.05 2.25 108.855.42 11.68 2.38 20.705.52 5.52 1.32 55.559.71 10.48 14.45 16.95

12.81 16.48 7.13 29.827.72 13.47 4.02 21.22

10.65 15.69 1.97 21.5216.11 43.41 3.95 74.73

Industry Name Number of firms Unlevered beta corrected for cas Market D/E RatioAdvertising 243 0.89 29.21%Aerospace/Defense 207 0.91 20.64%Air Transport 157 0.60 112.37%Apparel 1170 0.82 20.20%Auto & Truck 129 0.85 79.90%Auto Parts 609 1.11 28.99%Bank 580 0.40 292.47%Banks (Regional) 947 0.50 108.37%Beverage 107 0.89 22.46%Beverage (Alcoholic) 209 0.71 23.02%Biotechnology 707 1.03 8.69%Broadcasting 134 1.08 34.41%Brokerage & Investment Banking 521 0.35 319.89%Building Materials 414 0.81 36.58%Business & Consumer Services 714 0.77 24.95%Cable TV 63 0.72 50.82%Chemical (Basic) 735 0.92 14.60%Chemical (Diversified) 84 1.02 38.57%Chemical (Specialty) 681 0.88 22.78%Coal & Related Energy 322 0.90 57.62%Computer Services 939 0.87 18.06%Computer Software 1059 1.02 8.12%Computers/Peripherals 316 1.11 13.70%Construction 477 0.68 52.37%Diversified 341 0.59 71.91%Educational Services 161 0.79 27.72%Electrical Equipment 863 0.98 25.40%Electronics 1167 1.07 25.77%Electronics (Consumer & Office) 185 1.04 42.70%Engineering 1167 0.86 85.93%Entertainment 352 0.87 27.07%Environmental & Waste Services 312 0.86 37.33%Farming/Agriculture 341 0.66 45.02%Financial Svcs. 548 0.21 512.70%Financial Svcs. (Non-bank & Insuranc 133 0.28 297.89%Food Processing 1201 0.66 26.33%Food Wholesalers 115 0.59 79.91%Furn/Home Furnishings 319 0.87 23.46%Healthcare Equipment 448 0.81 16.06%Healthcare Facilities 170 0.49 75.84%Healthcare Products 159 0.81 15.03%Healthcare Services 322 0.70 30.65%Heathcare Information and Technolo 278 1.02 15.72%Heavy Construction 335 0.95 58.48%Homebuilding 164 1.04 55.58%Hotel/Gaming 648 0.74 34.47%Household Products 458 0.76 14.12%Information Services 177 0.79 11.07%Insurance (General) 235 0.66 41.00%

Insurance (Life) 121 1.05 51.73%Insurance (Prop/Cas.) 219 0.63 32.80%Internet software and services 706 1.10 3.96%Investment Co. 433 0.58 85.62%Machinery 1270 1.01 21.45%Metals & Mining 1691 1.03 38.74%Office Equipment & Services 161 0.62 38.62%Oil/Gas (Integrated) 53 1.04 30.51%Oil/Gas (Production and Exploration) 1172 0.74 87.13%Oil/Gas Distribution 199 0.73 56.54%Oilfield Svcs/Equip. 593 0.92 37.39%Packaging & Container 398 0.64 46.63%Paper/Forest Products 303 0.62 78.76%Pharma & Drugs 820 0.83 12.89%Power 743 0.49 101.76%Precious Metals 1181 1.15 31.00%Publshing & Newspapers 390 0.77 33.16%R.E.I.T. 49 0.13 551.46%Railroad 54 0.58 47.73%Real Estate 422 0.70 77.67%Real Estate (Development) 647 0.31 352.08%Real Estate (Operations & Services) 481 0.55 78.73%Recreation 286 0.86 27.88%Reinsurance 37 0.89 34.27%Restaurant 304 0.64 30.25%Retail (Automotive) 148 0.64 58.65%Retail (Building Supply) 50 0.74 29.98%Retail (Distributors) 848 0.57 89.94%Retail (General) 229 0.73 45.48%Retail (Grocery and Food) 174 0.53 55.81%Retail (Internet) 118 1.22 6.14%Retail (Special Lines) 543 0.80 29.07%Rubber& Tires 93 0.93 40.19%Semiconductor 559 1.34 13.62%Semiconductor Equip 263 1.23 18.75%Shipbuilding & Marine 356 0.64 94.62%Shoe 92 0.90 11.17%Steel 714 0.78 88.91%Telecom (Wireless) 116 0.75 40.71%Telecom. Equipment 525 1.13 15.03%Telecom. Services 317 0.57 66.59%Thrift 281 0.02 3737.43%Tobacco 53 0.61 17.47%Tranportation 228 0.71 47.23%Trucking 191 0.56 72.28%Utility (General) 55 0.43 95.19%Utility (Water) 97 0.61 52.46%Grand Total 40943 0.64 98.96%

Market Debt to CapitalEffective tax rate Dividend PayoutNet Margin Pre-tax Operating Margi ROE22.60% 17.09% 45.34% 4.06% 9.24% 9.99%17.11% 13.25% 35.52% 5.55% 9.50% 17.77%52.91% 15.59% 38.95% 2.33% 5.93% 7.99%16.80% 14.75% 39.23% 6.63% 14.05% 12.94%44.41% 13.90% 27.00% 4.52% 5.86% 13.13%22.47% 18.98% 18.30% 4.23% 6.73% 12.75%74.52% 18.14% 55.19% 27.02% 1.29% 11.61%52.01% 19.85% 22.18% 22.31% 0.52% 8.16%18.34% 10.40% 48.83% 10.13% 14.54% 22.39%18.71% 18.10% 31.09% 17.36% 20.22% 23.05%8.00% 2.91% 48.09% 6.81% 15.51% 6.60%

25.60% 17.82% 33.53% 14.14% 18.16% 21.25%76.18% 11.69% 26.21% 9.22% 1.79% 7.73%26.79% 18.24% 43.43% 3.00% 7.11% 6.42%19.97% 17.75% 49.04% 3.99% 8.69% 12.35%33.70% 15.62% 29.69% 7.69% 18.88% 21.29%12.74% 15.40% 54.60% 4.17% 8.94% 8.80%27.83% 22.63% 47.41% 4.76% 7.53% 12.91%18.55% 17.61% 38.20% 7.99% 11.62% 14.62%36.56% 6.27% NA -0.97% 6.13% -2.01%15.30% 17.30% 26.59% 5.02% 7.98% 19.46%7.51% 11.78% 28.01% 16.92% 23.07% 18.21%

12.05% 11.98% 30.46% 7.48% 10.59% 20.02%34.37% 14.84% 53.84% 5.41% 11.54% 7.79%41.83% 14.26% 34.41% 5.98% 9.18% 11.78%21.70% 14.13% 51.20% 2.61% 9.19% 4.28%20.26% 13.53% 61.98% 3.19% 7.14% 6.89%20.49% 13.29% 30.48% 3.54% 5.67% 7.43%29.92% 13.96% 48.63% 1.77% 3.78% 4.92%46.22% 16.25% 74.17% 1.92% 4.84% 7.57%21.30% 9.04% 20.35% 11.53% 17.28% 15.37%27.18% 11.45% 61.28% 3.46% 9.72% 7.40%31.04% 13.19% 48.66% 2.32% 4.13% 5.95%83.68% 17.33% 33.81% 11.77% 7.92% 6.26%74.87% 12.60% 15.41% 16.67% 5.14% 7.99%20.84% 16.40% 69.45% 4.88% 8.36% 12.12%44.42% 17.20% 44.01% 1.34% 2.95% 12.77%19.00% 16.03% 33.16% 4.27% 7.08% 13.00%13.83% 8.83% 36.54% 9.12% 18.70% 11.74%43.13% 16.65% 71.59% 3.53% 10.59% 15.02%13.06% 12.66% 30.87% 7.85% 12.86% 11.37%23.46% 17.26% 22.43% 2.38% 4.99% 11.96%13.58% 7.88% 30.60% 6.35% 12.33% 8.46%36.90% 17.11% 53.79% 3.13% 6.60% 8.67%35.72% 16.65% 16.67% 5.63% 5.52% 10.57%25.63% 12.36% 58.09% 5.82% 12.65% 8.37%12.37% 14.13% 75.58% 9.09% 14.84% 18.15%9.97% 17.57% 25.60% 15.11% 24.03% 22.69%

29.08% 13.95% 45.22% 3.83% 8.75% 7.18%

34.09% 18.80% 34.92% 4.69% 8.72% 9.37%24.70% 15.06% 24.53% 7.02% 11.08% 12.24%3.81% 8.65% 6.85% 14.93% 19.41% 13.84%

46.13% 6.96% 34.66% 18.51% 13.91% 10.15%17.66% 17.45% 36.51% 5.80% 9.05% 10.97%27.92% 3.58% 316.32% 1.41% 13.41% 1.65%27.86% 17.66% 45.05% 3.39% 8.05% 9.81%23.38% 24.53% 30.85% 7.34% 10.15% 15.23%46.56% 6.93% 45.72% 10.79% -5.04% 8.23%36.12% 9.63% 108.55% 4.24% 8.21% 11.22%27.21% 13.98% 33.27% 2.37% 4.48% 11.41%31.80% 17.72% 44.40% 3.62% 8.01% 9.57%44.06% 12.53% 114.34% 1.39% 5.75% 2.59%11.41% 13.54% 50.49% 14.89% 21.35% 16.90%50.44% 14.72% 64.23% 5.28% 11.62% 7.65%23.66% 2.16% NA -20.01% 9.83% -11.36%24.90% 15.19% 187.87% 1.66% 8.19% 2.87%84.65% 2.32% 84.29% 72.66% 1.25% 12.51%32.31% 25.54% 26.19% 11.61% 19.80% 12.90%43.72% 13.99% 26.13% 15.48% 13.73% 8.56%77.88% 17.32% 34.06% 19.06% 22.85% 14.43%44.05% 12.90% 25.16% 25.07% 29.44% 9.81%21.80% 17.48% 40.63% 6.72% 11.23% 11.56%25.52% 10.81% 32.45% 7.16% 11.06% 10.68%23.23% 21.05% 50.33% 5.48% 12.50% 17.79%36.97% 18.79% 22.32% 2.43% 4.75% 16.48%23.07% 26.05% 36.81% 4.51% 7.93% 15.90%47.35% 19.04% 34.70% 2.57% 3.84% 10.06%31.26% 23.63% 35.52% 2.86% 5.12% 13.49%35.82% 26.17% 46.19% 2.17% 4.38% 14.30%5.78% 13.55% 8.66% 3.13% 4.77% 14.86%

22.52% 20.75% 34.63% 3.98% 8.29% 14.99%28.67% 20.06% 20.20% 5.72% 10.00% 17.79%11.99% 9.04% 29.08% 10.24% 13.92% 14.76%15.79% 9.61% 170.91% 1.34% 4.92% 1.32%48.62% 12.58% 110.06% 2.22% 7.90% 3.14%10.05% 20.41% 30.99% 7.50% 10.69% 18.98%47.06% 12.97% NA -0.21% 3.56% -0.48%28.93% 15.35% 41.95% 13.08% 16.56% 18.12%13.07% 9.56% 75.82% 3.76% 9.74% 5.87%39.97% 12.92% 100.99% 5.24% 15.09% 8.85%97.39% 18.73% 1.49% 150.80% 1.37% -92.45%14.87% 20.52% 63.20% 17.97% 28.82% 53.36%32.08% 20.49% 46.54% 5.12% 8.62% 15.64%41.96% 23.30% 27.32% 2.89% 8.12% 9.12%48.77% 25.18% 102.76% 3.38% 10.82% 7.01%34.41% 15.09% 46.04% 20.10% 28.18% 14.98%

49.74% 13.40% 37.49% 5.74% 8.63% 10.49%

ROIC Sales/Capital EV/Sales Revenue Growth rate: Last 5 yearExpected Earnings growth: Next 5 years29.68% 3.87 1.60 5.04% 16.29%38.24% 4.64 1.40 4.86% 13.36%6.49% 1.30 1.11 7.67% 19.39%

18.76% 1.57 1.78 6.38% 20.51%7.83% 1.55 0.92 6.71% 22.72%

14.35% 2.63 0.78 6.04% 18.26%0.11% 0.10 9.84 8.98% 12.38%0.10% 0.24 4.12 6.44% 8.34%

22.04% 1.69 2.42 6.04% 12.59%15.32% 0.93 3.55 6.88% 10.94%12.88% 0.86 9.58 11.03% 32.55%17.39% 1.17 2.78 4.12% 11.19%0.28% 0.18 5.98 4.59% 17.90%

10.13% 1.74 1.15 5.37% 17.79%21.52% 3.01 1.39 7.52% 16.51%19.08% 1.20 3.17 10.40% 11.06%11.00% 1.45 2.68 6.09% 22.47%9.92% 1.70 1.16 2.78% 22.26%

15.00% 1.57 1.62 8.57% 16.90%8.98% 1.56 0.99 15.68% -0.79%

27.79% 4.21 1.03 6.29% 13.73%38.49% 1.89 4.05 7.96% 21.44%29.25% 3.14 1.20 -0.84% 16.87%9.78% 0.99 1.72 6.24% 21.19%7.86% 1.00 1.57 7.97% 15.32%

12.71% 1.61 1.60 8.79% 19.76%12.91% 2.09 1.29 4.67% 21.87%9.83% 2.00 0.97 2.29% 19.03%8.06% 2.48 0.59 2.59% 21.94%9.89% 2.44 0.62 6.18% 18.17%

23.13% 1.47 2.81 2.02% 25.22%15.96% 1.86 1.74 8.64% 14.17%6.55% 1.82 0.78 8.82% 19.48%0.40% 0.06 13.99 9.27% 17.22%0.64% 0.14 7.55 19.67% 14.34%

14.58% 2.09 1.39 7.16% 18.55%14.29% 5.84 0.37 2.07% 14.60%17.16% 2.88 0.91 3.04% 25.90%25.53% 1.50 2.86 7.64% 17.56%11.50% 1.30 1.77 12.96% 24.78%16.25% 1.45 3.02 16.82% 17.06%30.18% 7.31 0.58 12.41% 15.91%17.89% 1.57 3.25 8.13% 18.02%8.46% 1.55 1.16 3.60% 15.03%5.48% 1.19 1.22 3.48% 7.33%

10.93% 0.99 2.60 9.11% 22.06%27.19% 2.13 2.47 8.81% 17.01%46.09% 2.33 4.18 6.21% 15.05%12.88% 1.71 0.81 9.69% 13.58%

12.09% 1.71 0.95 12.08% 13.40%13.02% 1.38 1.00 7.94% 15.06%23.77% 1.34 6.76 9.58% 25.78%4.46% 0.34 4.97 -2.32% 11.70%

13.46% 1.80 1.50 2.08% 18.51%11.73% 0.91 1.88 9.15% 11.14%14.30% 2.16 1.06 0.82% 13.47%12.66% 1.65 0.80 6.66% 35.36%-1.47% 0.31 4.50 12.46% 19.72%8.65% 1.17 1.96 11.09% 15.43%

13.66% 3.55 0.58 9.00% 20.49%11.57% 1.76 1.15 6.04% 15.75%5.19% 1.03 1.18 2.19% 17.78%

21.64% 1.17 3.59 12.16% 21.07%6.65% 0.67 1.86 12.80% 9.97%5.17% 0.54 2.21 29.33% -1.21%

11.77% 1.70 1.57 0.47% 8.91%0.03% 0.03 32.55 20.47% 5.47%7.92% 0.54 2.76 4.64% 11.23%3.68% 0.31 3.59 3.78% 17.10%9.44% 0.50 6.77 13.65% 25.13%5.31% 0.21 6.19 11.14% 12.35%

11.71% 1.26 1.84 2.77% 18.68%13.03% 1.32 0.83 13.21% 8.41%16.11% 1.63 2.05 5.91% 15.64%11.44% 2.97 0.75 9.04% 19.76%11.86% 2.02 1.25 4.20% 22.18%6.19% 1.99 0.67 5.91% 14.68%

10.77% 2.76 0.75 8.91% 13.60%11.05% 3.42 0.61 6.59% 14.50%27.88% 6.75 3.19 9.44% 29.50%15.98% 2.43 1.17 4.59% 14.41%14.48% 1.81 0.94 6.75% 16.88%18.11% 1.43 1.81 2.98% 20.75%4.57% 1.03 2.41 -0.13% 20.03%4.98% 0.72 1.65 3.58% 16.52%

20.37% 2.39 1.71 8.24% 13.36%4.27% 1.38 0.80 1.63% 20.35%

13.56% 0.97 2.29 8.86% 13.91%17.10% 1.94 1.75 4.09% 16.31%13.89% 1.06 1.84 7.03% 9.14%0.02% 0.02 60.82 9.30% 10.42%

55.99% 2.44 3.52 9.63% 10.78%11.79% 1.72 1.36 11.70% 11.57%9.39% 1.51 1.08 1.87% 14.48%8.66% 1.07 1.27 4.05% 4.99%8.97% 0.37 4.43 9.67% 16.97%

5.11% 0.77 1.76 8.94% 16.07%

Expected Earnings growth: Next 5 years

Country Marginal tax rateAbu Dhabi 19.22%Albania 10.00%Andorra 21.21%Angola 35.00%Anguilla 28.10%Argentina 35.00%Armenia 20.00%Aruba 28.00%Australia 30.00%Austria 25.00%Azerbaijan 16.38%Bahamas 0.00%Bahrain 0.00%Bangladesh 27.50%Barbados 25.00%Belarus 18.00%Belgium 33.99%Belize 26.88%Benin 28.10%Bermuda 0.00%Bolivia 25.00%Bosnia and Herzegovi 10.00%Botswana 22.00%Brazil 34.00%British Virgin Islands 14.92%Bulgaria 10.00%Burkina Faso 28.10%Cambodia 20.00%Cameroon 28.10%Canada 26.00%Cape Verde 28.10%Cayman Islands 0.00%Channel Islands 0.00%Chile 20.00%China 25.00%Colombia 25.00%Cook Islands 0.00%Costa Rica 30.00%Croatia 20.00%Cuba 14.92%Curacao 27.50%Cyprus 12.50%Czech Republic 19.00%Democratic Republic 28.10%Denmark 25.00%Dominican Republic 29.00%Ecuador 22.00%Egypt 25.00%El Salvador 30.00%

Estonia 21.00%Falkland Islands 26.88%Fiji 20.00%Finland 24.50%France 33.33%Gabon 28.10%Georgia 15.00%Germany 29.55%Ghana 21.21%Greece 26.00%Greenland 21.21%Guatemala 31.00%Honduras 35.00%Hong Kong 16.50%Hungary 19.00%Iceland 20.00%India 33.99%Indonesia 25.00%Ireland 12.50%Isle of Man 0.00%Israel 25.00%Italy 31.40%Ivory Coast 28.10%Jamaica 25.00%Japan 38.01%Jordan 14.00%Kazakhstan 20.00%Kenya 30.00%Kuwait 15.00%Kyrgyzstan 16.38%Laos 23.63%Latvia 15.00%Lebanon 19.22%Liechtenstein 12.50%Lithuania 15.00%Luxembourg 29.22%Macau 12.00%Macedonia 10.00%Malawi 30.00%Malaysia 25.00%Malta 35.00%Marshall Islands 0.00%Mauritius 15.00%Mexico 30.00%Moldova 16.38%Monaco 21.21%Mongolia 23.63%Montenegro 9.00%Montserrat 14.92%Morocco 28.10%

Mozambique 32.00%Namibia 33.00%Netherlands 25.00%Netherlands Antilles 14.92%New Zealand 28.00%Nicaragua 26.88%Niger 28.10%Nigeria 30.00%Norway 28.00%Oman 12.00%Pakistan 35.00%Palestinian Authority 19.22%Panama 25.00%Papua New Guinea 30.00%Paraguay 10.00%Peru 30.00%Philippines 30.00%Poland 19.00%Portugal 25.00%Qatar 10.00%Ras Al Kaminah 19.22%Republic of the Cong 28.10%Reunion 28.10%Romania 16.00%Russia 20.00%Rwanda 28.10%Saudi Arabia 20.00%Senegal 28.10%Serbia 15.00%Sierra Leone 28.10%Singapore 17.00%Slovakia 23.00%Slovenia 17.00%South Africa 28.00%South Korea 24.20%Spain 30.00%Sri Lanka 28.00%St. Maarten 14.92%St. Vincent & the Gre 14.92%Sudan 35.00%Suriname 26.88%Sweden 22.00%Switzerland 18.01%Taiwan 17.00%Tanzania 30.00%Thailand 20.00%Togo 28.10%Trinidad & Tobago 25.00%Tunisia 30.00%Turkey 20.00%

Turks & Caicos Islan 28.10%Uganda 30.00%Ukraine 19.00%United Arab Emirates 55.00%United Kingdom 23.00%United States 40.00%Uruguay 25.00%Venezuela 34.00%Vietnam 25.00%Zambia 35.00%Zimbabwe 25.75%

Region Tax RateAfrica 28.10%Asia 23.63%Australia & New Zealan 26.00%Caribbean 14.92%Central and South Amer 26.88%Eastern Europe & Russi 16.38%Middle East 19.22%North America 33.00%

Western Europe 21.21%

Global 22.04%

Country Long-Term RatingAdj. Default SpreadAbu Dhabi Aa2 0.50%Albania B1 4.50%Andorra A3 1.20%Angola Ba3 3.60%Argentina B3 6.50%Armenia Ba2 3.00%Aruba Baa1 1.60%Australia Aaa 0.00%Austria Aaa 0.00%Azerbaijan Baa3 2.20%Bahamas Baa1 1.60%Bahrain Baa2 1.90%Bangladesh Ba3 3.60%Barbados Ba1 2.50%Belarus B3 6.50%Belgium Aa3 0.60%Belize Caa2 9.00%Benin B2 5.50%Bermuda Aa3 0.60%Bolivia Ba3 3.60%Bosnia and Herzegovina B3 6.50%Botswana A2 0.85%Brazil Baa2 1.90%Bulgaria Baa2 1.90%Burkina Faso B2 5.50%Cambodia B2 5.50%Cameroon B2 5.50%Canada Aaa 0.00%Cape Verde B2 5.50%Cayman Islands Aa3 0.60%Chile Aa3 0.60%China Aa3 0.60%Colombia Baa3 2.20%Cook Islands B1 4.50%Costa Rica Baa3 2.20%Croatia Ba1 2.50%Cuba Caa1 7.50%Curacao B1 4.50%Cyprus Caa3 10.00%Czech Republic A1 0.70%Democratic Republic of B3 6.50%Denmark Aaa 0.00%Dominican Republic B1 4.50%Ecuador Caa1 7.50%Egypt Caa1 7.50%

El Salvador Ba3 3.60%Estonia A1 0.70%Fiji B1 4.50%Finland Aaa 0.00%France Aa1 0.40%Gabon Ba3 3.60%Georgia Ba3 3.60%Germany Aaa 0.00%Ghana B1 4.50%Greece Caa3 10.00%Guatemala Ba1 2.50%Honduras B2 5.50%Hong Kong Aa1 0.40%Hungary Ba1 2.50%Iceland Baa3 2.20%India Baa3 2.20%Indonesia Baa3 2.20%Ireland Ba1 2.50%Isle of Man Aa1 0.40%Israel A1 0.70%Italy Baa2 1.90%Jamaica Caa3 10.00%Japan Aa3 0.60%Jordan B1 4.50%Kazakhstan Baa2 1.90%Kenya B1 4.50%Korea Aa3 0.60%Kuwait Aa2 0.50%Latvia Baa2 1.90%Lebanon B1 4.50%Liechtenstein Aaa 0.00%Lithuania Baa1 1.60%Luxembourg Aaa 0.00%Macao Aa3 0.60%Macedonia Ba3 3.60%Malaysia A3 1.20%Malta A3 1.20%Mauritius Baa1 1.60%Mexico Baa1 1.60%Moldova B3 6.50%Mongolia B1 4.50%Montenegro Ba3 3.60%Montserrat Baa3 2.20%Morocco Ba1 2.50%Mozambique B1 4.50%Namibia Baa3 2.20%

Netherlands Aaa 0.00%New Zealand Aaa 0.00%Nicaragua B3 6.50%Nigeria Ba3 3.60%Norway Aaa 0.00%Oman A1 0.70%Pakistan Caa1 7.50%Panama Baa2 1.90%Papua New Guinea B1 4.50%Paraguay Ba3 3.60%Peru Baa2 1.90%Philippines Baa3 2.20%Poland A2 0.85%Portugal Ba3 3.60%Qatar Aa2 0.50%Ras Al Kaminah A2 0.85%Republic of the Congo Ba3 3.60%Romania Baa3 2.20%Russia Baa1 1.60%Rwanda B2 5.50%Saudi Arabia Aa3 0.60%Senegal B1 4.50%Serbia B1 4.50%Singapore Aaa 0.00%Slovakia A2 0.85%Slovenia Ba1 2.50%South Africa Baa1 1.60%Spain Baa3 2.20%Sri Lanka B1 4.50%St. Maarten Baa1 1.60%St. Vincent & the Grena B2 5.50%Suriname Ba3 3.60%Sweden Aaa 0.00%Switzerland Aaa 0.00%Taiwan Aa3 0.60%Thailand Baa1 1.60%Trinidad and Tobago Baa1 1.60%Tunisia Ba3 3.60%Turkey Baa3 2.20%Uganda B1 4.50%Ukraine Caa1 7.50%United Arab Emirates Aa2 0.50%United Kingdom Aa1 0.40%United States of Americ Aaa 0.00%Uruguay Baa3 2.20%Venezuela Caa1 7.50%

Vietnam B2 5.50%Zambia B1 4.50%

Region Weighted AverageWeighted Average: TRPAfrica 3.36% 10.04%Asia 1.00% 6.51%Australia & New Zealand 0.00% 5.00%Caribbean 5.10% 12.65%Central and South Americ 2.42% 8.62%Eastern Europe & Russia 1.98% 7.96%Global 0.90% 6.35%Middle East 0.76% 6.14%North America 0.00% 5.00%Western Europe 0.86% 6.29%

Total Risk Premium Country Risk Premium Region5.75% 0.75% Middle East

11.75% 6.75% Eastern Europe & Russia

6.80% 1.80% Western Europe

10.40% 5.40% Africa

14.75% 9.75% Central and South America


7.40% 2.40% Caribbean

5.00% 0.00% Australia & New Zealand




7.85% 2.85% Middle East

10.40% 5.40% Asia





13.25% 8.25% Africa




6.28% 1.28% Africa



13.25% 8.25% Africa

13.25% 8.25% Asia

13.25% 8.25% Africa

5.00% 0.00% North America

13.25% 8.25% Africa



5.90% 0.90% Asia





16.25% 11.25% Caribbean




14.75% 9.75% Africa




16.25% 11.25% Africa



11.75% 6.75% Asia



10.40% 5.40% Africa



11.75% 6.75% Africa




5.60% 0.60% Asia



8.30% 3.30% Asia

8.30% 3.30% Asia





20.00% 15.00% Caribbean

5.90% 0.90% Asia



11.75% 6.75% Africa

5.90% 0.90% Asia







5.90% 0.90% Asia


6.80% 1.80% Asia


7.40% 2.40% Asia



11.75% 6.75% Asia



8.75% 3.75% Africa

11.75% 6.75% Africa

8.30% 3.30% Africa




10.40% 5.40% Africa



16.25% 11.25% Asia


11.75% 6.75% Asia



8.30% 3.30% Asia





10.40% 5.40% Africa



13.25% 8.25% Africa


11.75% 6.75% Africa


5.00% 0.00% Asia



7.40% 2.40% Africa


11.75% 6.75% Asia






5.90% 0.90% Asia

7.40% 2.40% Asia


10.40% 5.40% Africa


11.75% 6.75% Africa




5.00% 0.00% North America



13.25% 8.25% Asia

11.75% 6.75% Africa

Weighted Average: CRP5.04%1.51%0.00%7.65%3.62%2.96%1.35%1.14%0.00%1.29%

Last 10K First X months: Last yearRevenues $7,275.00 $1,481.85R&D expense $821.00 $164.10Operating income or EBIT $4,017.00 $873.67Interest expenses $354.00 $174.25Book value of equity $4,945.85Book value of debt $6,678.86Do you have operating lease commitments?Cash and cross holdings $7,034.00Non-operating assets $0.00Minority interests $0.00Number of shares outstanding =Current stock price =Effective tax rate = 11.92% 11.71%Marginal tax rate =Lease commitmentsYear 1 $142.00Year 2 $128.00Year 3 $117.00Year 4 $110.00Year 5 $102.00Beyond year 5 $252.00

First X months: Current yearTrailing 12 month$2,152.00 $7,945.15$315.00 $971.90

$1,103.00 $4,246.33$66.00 $245.75

$8,283.00$10,012.00

$9,330.00$0.00$0.00

10.34%

NANANANANANA

Yes/No Book or Market ValueERP choices Cost of debt Synthetic rati BetaYes B Will input Direct input 1 Direct inputNo V Country of incorporatio Synthetic rati 2 Single Business(US)

Operating countries Actual rating Single Business(Global)Operating regions Multibusiness(US)

Multibusiness(Global)

Single Business(US)Single Business(Global)Multibusiness(US)Multibusiness(Global)

Company Business % of equity Value in balance shee% of Market Cap Market capWeibo Social media 18.00% $586 $558.00 $3,100UCWeb Mobile Web Browser 66.00% $506 AutoNavi Digital Maps 28.00% $294 $316.40 $1,130Zheijiang Logistics Infrastructure 43.00% $270 Shoprunner Online Shopping Platfor 39.00% $206

alibaba i pose pt 14

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