Apple
STUDENT MANAGED INVESTMENT FUND
Katherine Gonzalez Zachary Schwager Carlos Valcarcel
Special Thanks to: John Neumann
Company Overview II. Product line-up III. Geographical Sales IV. Apple 10 yr Stock chart V. Industry Overview VI. Current Events VII. Fundamental Analysis VIII. DuPont Analysis IX. Market Share X. Pro Forma Income Statement XI. Relative Valuation XII. Absolute Valuation XIII. Recommendations
I.
Agenda
Apple Inc. was founded by Steve Jobs and Steve Wozniak in 1976.
Apple Computer, Inc., is an American multinational corporation with a focus on designing and manufacturing consumer electronics and closely related software products As of September 2007, the company operates 194 retail stores in the United States, and more in the United Kingdom, Japan, Canada, and Italy
Company Overview
For a variety of reasons, ranging from its philosophy of comprehensive aesthetic design to their advertising campaigns, Apple has engendered a distinct reputation in the consumer electronics industry and has cultivated a customer base that is unusually devoted to the company and its brand, particularly in the United States.
Computers Cellular phones MP3 players Software Online Music Vendor Distributes third party computer Accessories “Apple TV” an online television adapter
Product line-up
Mac Desktop
1%
10%
5%
6%
17%
Mac Portables Ipod
iTunes - Other Music Related products & Services Iphone & Related products and Serivces Peripherals & other hardware
26%
35%
Software, service, and other net sales
Revenue by Product
The Company manages it business on a geographic basis. The operating segments consist of Americas, Europe, Japan, and Retail.
Geographical Sales
AAPL 10 Year Stock Chart
Apple Inc. competes in the Technology Industry, Their focus is: ◦ Computers ◦ Cellular Phones ◦ Online music ◦ Software ◦ Computer accessories
The Technology Industry is highly competitive and characterized by rapid technological advances in both hardware and software. Because Apple participates in several components of the highly dynamic Technology Industry, Apple’s strategy has been to be an Innovator rather than a follower.
Apple’s Greatest competitor is the Microsoft Corporation.
Industry Overview
Financial Results
◦ Apple reported highest ever 4th quarter revenue and earnings:
Revenue increase over 6.22 billion or 29%, driven by strong Mac and iPods sales Robust growth from iTunes revenue 2007 Fiscal Year EPS: $3.93, up 73%
iPhone
◦ Apple sold over 1.1 million iPhones over the last quarter, ◦ Began selling iPhones in Europe November 9, 2007 ◦ Apple plans to sell 10 million iPhones in 2008
Apple will also unveil a new sub-portable MacBook
◦ The ultra-portable laptop is expected to be 50% thinner than the existing MacBook ◦ Will contain flash-based memory instead of a disc drive.
New Apple store highlights "geniuses," services
◦ Apple stores pulled in $1.25 billion in revenue in the company's last fiscal quarter ◦ 42% jump from a year earlier and accounting for a fifth of total revenue.
Current Events
Income/Cash Flow
Sales Net Income Cash Flow from Operations
80.00%
60.00%
40.00%
20.00%
0.00%
-20.00%
-40.00% AAPL DELL HPQ MSFT Industry Avg SP500
2000-2001
-32.82% 14.16%
2001-2002
7.07% -1.61%
2002-2003
8.10% 19.14%
2003-2004
33.38% 18.83%
2004-2005
68.27% 15.82%
2005-2006
38.65% 9.67%
2006-2007
24.29% 1.30%
2000-2006
17.03% 10.77%
1.75%
9.93%
3.60%
16.87%
44.20%
8.91%
9.98%
15.78%
8.68%
6.69%
5.69%
12.42%
11.70%
19.23%
11.52%
12.75%
+ 0.0
3.25%
-5.04%
-2.38%
9.35%
4.58%
13.57%
11.32%
6.82%
7.51%
11.25%
8.69%
8.14%
5.10%
6.56%
5.36%
Sales Growth
1400.00%
1200.00%
1000.00% 800.00%
600.00%
400.00%
200.00%
0.00% -200.00% -400.00% AAPL DELL HPQ MSFT Industry Avg SP500
2000-2001
-104.71% -20.72%
2001-2002
-275.68% 25.46%
2002-2003
4.62% 29.30%
2003-2004
291.18% 24.05%
2004-2005
399.25% 14.28%
2005-2006
49.77% -12.14%
2006-2007
75.77% -4.68%
2000-2006
23.76% 6.23%
-56.99%
-34.53%
-178.86%
-4.83%
279.27%
32.57%
58.10%
-0.27%
-5.97%
59.21%
60.01%
0.54%
38.23%
15.00%
10.41%
6.13%
-85.74%
-113.68%
-33.33%
-89.20%
269.05%
1270.00%
103.87%
507.69%
46.94%
-4.36%
6.25%
14.41%
20.00%
17.10%
4.27%
4.33%
Net Income Growth
250.00% 200.00% 150.00%
100.00%
50.00% 0.00%
-50.00%
-100.00% AAPL DELL HPQ MSFT Industry Avg SP500
2000-2001
-78.69% 3.58%
2001-2002
-51.35% -13.59%
2002-2003
221.11% 4.96%
2003-2004
223.18% 4.94%
2004-2005
171.41% 63.51%
2005-2006
-12.43% -29.16%
2006-2007
146.40% -11.68%
2000-2006
30.08% 0.12%
-60.10%
20.14%
222.08%
24.84%
-8.54%
-24.54%
5.95%
16.55%
48.23%
11.30%
22.95%
-16.49%
-7.45%
38.75%
11.19%
7.89%
-5.34%
3.70%
23.26%
11.54%
0.51%
-10.19%
12.82%
7.21%
10.96%
19.40%
5.52%
-10.03%
16.00%
22.16%
8.73%
5.57%
Cash Flow from Operations
Operating Performance
ROE ROA EBIT Net Profit Margin Asset Turnover
80.000 60.000 40.000 20.000 0.000
(20.000)
(40.000) (60.000) AAPL
2000
21.800 37.693 20.220 25.588
2001
(0.922) 25.745 10.267 13.688
2002
1.622 38.735 (4.593) 11.984
2003
1.635 47.319 5.647 13.485
2004
5.721 50.474 8.648 11.333
2005
21.241 57.665 8.077 20.708
2006
22.846 69.435 13.337 30.644
2007
28.520 62.285 18.549 43.602
DELL
HPQ MSFT Industry Avg SP500
29.100
15.300
(1.800)
7.000
(34.900)
3.100
7.700
9.800
14.000
15.800
20.100
16.700
17.100
17.600
16.600
15.700
ROE
25.000 20.000 15.000
10.000
5.000 0.000 (5.000) (10.000) AAPL DELL HPQ MSFT
2000
2001
2002
2003
2004
2005
2006
2007
13.139
16.756
(0.577)
11.051
1.055
13.533
1.037
15.574
3.579
16.210
13.575
15.880
13.850
12.929
16.432
11.017
10.218
20.491 16.800 10.000
4.510
10.937 (4.400) 1.700
(2.233)
9.290 (3.800) 1.000
2.902
10.490 2.800 3.100
4.479
9.053 8.200 7.600
4.103
15.528 12.600 8.300
6.361
18.910 10.400 8.400
8.272
22.712 12.100 7.80
Industry Avg
SP500
ROA
25,000.00
20,000.00
15,000.00
10,000.00
5,000.00
0.00
-5,000.00 AAPL DELL HPQ MSFT
2000
2001
2002
2003
2004
2005
2006
2007
1,121.00
2,912.00
(25.00)
2,719.00
129.00
2,622.00
126.00
3,421.00
396.00
4,064.00
1,808.00
4,726.00
2,818.00
3,875.00
5,008.00
3,786.00
4,653.00
14,977.00 2,035.00 1,227.00
2,318.00
9,560.00 819.00 787.00
2,235.00
9,695.00 570.00 466.00
3,690.00
12,914.00 1,064.00 903.00
4,705.00
15,129.00 1,517.00 1,270.00
5,018.00
19,630.00 2,112.00 1,563.00
7,354.00
19,709.00 2,289.00 1,695.00
9,175.00
21,740.00 2,601.00 1,591.00
Industry Avg
SP500
EBIT
60.000 40.000 20.000 0.000
(20.000)
(40.000) (60.000) (80.000)
(100.000) (120.000)
(140.000) (160.000) AAPL DELL HPQ MSFT
9.846
6.494
-0.690
4.509
1.132
5.750
1.096
6.240
3.213
6.514
9.533
6.427
10.298
5.149
14.563
4.845
7.250
42.039 35.000 0.000
3.065
25.035 (133.40) (33.00)
(2.33)
20.387 (21.20) (11.50)
2.901
24.816 3.000 (1.60)
4.170
21.376 10.200 7.600
3.608
31.896 16.700 7.100
5.462
28.524 15.200 9.100
6.760
27.511 11.700 0.089
Industry Avg
S&P 500
Net Profit Margin
3.000
2.500
2.000
1.500
1.000
0.500
0.000
AAPL
2000
1.335 2.580 1.409 0.487 1.000 1.200
2001
0.836 2.451 1.472 0.437 0.800 1.100
2002
0.932 2.354 0.957 0.456 0.800 1.000
2003
0.947 2.496 1.000 0.423 0.800 1.000
2004
1.114 2.488 1.074 0.424 0.800 1.100
2005
1.424 2.471 1.137 0.487 0.800 1.100
2006
1.345 2.511 1.164 0.663 0.800 1.100
2007
1.128 2.274 1.224 0.826 0.800 1.100
DELL
HPQ
MSFT
Industry Avg S&P 500
Asset Turnover
Short Term Liquidity
Current Ratio Quick Ratio Receivables Turnover
5.0000
4.5000
4.0000
3.5000
3.0000 2.5000 2.0000 1.5000
1.0000
0.5000 0.0000 AAPL
2000
2.8076 1.4512 1.6105 3.1069
2001
3.3880 1.2261 1.5027 4.2371
2002
3.2497 1.0296 1.4595 3.8117
2003
2.4977 1.0370 1.5458 4.2202
2004
2.6613 0.9905 1.2685 4.6860
2005
2.9538 1.1295 1.2016 2.8587
2006
2.25 1.00 1.30 2.10
2007
2.36 1.30 1.20 1.60
DELL
HPQ MSFT Industry Avg S&P 500
2.9000
2.2000
2.7000
2.3000
2.5000
2.2000
2.5000
2.3000
2.7000
2.3000
2.8000
2.3000
2.70
2.20
2.70
2.20
Current Ratio
5.000 4.500 4.000
3.500
3.000 2.500 2.000 1.500
1.000
0.500 0.000 AAPL
2000
2.790 1.37 1.20 3.10
2001
3.381 1.18 1.11 4.23
2002
3.223 0.99 1.24 3.76
2003
2.474 1.00 1.29 4.17
2004
2.623 0.99 1.27 4.69
2005
2.907 1.13 1.20 2.86
2006
2.21 1.00 1.10 1.90
2007
2.32 1.20 1.00 1.50
DELL
HPQ MSFT Industry Avg S&P 500
2.80
1.80
2.50
1.80
2.40
1.80
2.40
1.90
2.60
1.90
2.70
1.90
2.60
1.80
2.50
1.80
Quick Ratio
80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0.000 AAPL DELL HPQ MSFT
2000
2001
2002
2003
2004
2005
2006
2007
9.771
10.590
7.559
11.483
11.139
12.098
9.327
13.955
10.752
13.946
16.694
12.775
17.993
10.688
16.619
8.976
6.454
8.677 7.900 15.300
6.440
7.560 7.700 15.900
5.343
7.436 7.300 20.700
6.392
7.271 8.100 26.000
7.047
7.845 8.600 73.100
7.494
7.398 8.600 76.100
7.650
7.154 8.700 55.400
7.585
6.818 8.900 21.000
Industry Avg
S&P 500
Receivables Turnover
Debt to Equity AAPL DELL HPQ MSFT Industry Avg S&P 500 Financial Leverage AAPL DELL HPQ MSFT Industry Avg S&P 500 TIE AAPL DELL HPQ MSFT Industry Avg S&P 500
2000 7.305 7.892 34.323 0.000 16.300 73.300 2000 1.656 2.100 2.200 1.261 1.700 2.400 2000 51.700 N/A 21.1 N/A 64.6 1037.4
2001 8.087 10.505 39.823 0.000 31.100 66.600 2001 1.536 2.700 2.300 1.244 1.900 1.100 2001 5.700 57.9 N/A N/A 33.4 48.7
2002 7.717 11.301 23.090 0.000 25.400 73.000 2002 1.538 3.100 2.000 1.296 1.700 2.500 2002 27.500 90.4 10.5 N/A 20.7 43.9
2003 7.199 9.190 21.120 0.000 25.400 86.100 2003 1.614 3.000 1.900 1.259 1.900 3.000 2003 15.750 201.2 14.5 N/A 255.9 57.3
2004 2005 0.000 0.000 8.136 9.149 18.390 15.439 0.000 0.000 20.400 45.700 60.800 138.300 2004 1.586 3.200 1.900 1.261 1.800 1.900 2004 62.800 290.3 17 N/A 122.8 68.1 2005 1.550 4.100 2.000 1.472 2.300 4.500 2005 N/A 315.1 12.2 N/A 359.3 222.8
2006 0.000 21.546 18.617 21.617 21.100 68.100 2006 1.723 7.700 2.200 1.735 2.100 3.100 2006 N/A 133.60 20.70 N/A 349.90 316.10
2007 0.000 11.681 23.315 0.000 28.200 81.800 2007 1.744 4.600 2.300 2.031 2.900 9.800 2007 N/A 84.10 25.20 N/A 461.20 753.50
Long-term Solvency
ROE (%)
2000 21.800
2001 (0.922)
2002 1.622
2003 1.635
2004 5.721
2005 21.241
2006 22.846
2007 28.520
Asset Turnover
Net Profit Margin
1.335 9.846 1.659
0.836 -0.690 1.598
0.932 1.132 1.537
0.947 1.096 1.576
1.114 3.213 1.599
1.424 9.533 1.565
1.345 10.298 1.649
1.128 14.563 1.736
Financial Leverage
Decompose ROE into its components (Asset Turnover, Net Profit Margin, Financial Leverage) in order to analyze what might be trying to change ROE. Net Profit Margin Has significantly been increasing and affecting ROE.
DuPont Analysis
Aggregate Industry Revenue Sales Apple Dell HPQ MSFT IBM MOT GOOG QCOM JAVAD RIMM 2000 7,983.00 25,265.00 48,870.00 22,956.00 85,089.00 32,107.00 19.10 3,196.80 15,721.00 221.30 2001 5,363.00 31,888.00 45,226.00 25,296.00 83,067.00 26,468.00 86.40 2,679.80 18,250.00 294.10 2002 5,742.00 31,168.00 56,588.00 28,365.00 81,186.00 23,422.00 439.50 2,915.00 12,496.00 306.70 2003 6,207.00 2004 8,279.00 2005 13,931.00 49,121.00 86,696.00 39,788.00 91,134.00 35,262.00 6,138.60 5,673.00 11,070.00 2,065.80 2006YTD 2007 E(2008) 19,315.00 55,788.00 91,658.00 44,282.00 91,423.00 42,879.00 10,604.90 7,526.00 13,068.00 3,037.00 16,891.00 43,968.00 75,993.00 41,531.00 69,920.00 26,976.00 11,767.40 6,852.00 10,337.00 3,384.60 30,045.0 64,380.0 113,476.0 62,382.0 102,077.0 40,163.0 16,694.0 10,171.0 14,568.0 7,961.0
35,404.00 41,444.00 73,061.00 79,905.00 32,187.00 36,835.00 89,131.00 96,293.00 23,155.00 29,663.00 1,465.90 3,847.00 3,189.20 4,880.00
11,434.00 11,185.00 594.60 1,350.40
Total 241,428.20 238,618.30 242,628.20 276,486.50 313,023.60 340,879.40 379,580.90 307,620.00 461,917.00 Market Share Sales Apple 2000 3.307% 2001 2.248% 2002 2.367% 2003 2.245% 2004 2.645% 2005 4.087% 2006YTD 2007 5.089% 5.491% 2008 6.5%
Market Share
A comparison with Apple’s main competitors to establish it’s market-share in the industry
Industry Revenues --------------------->
379,580.90 2006 5.09% 3,319.0 4,056.0 17.18% 21.00%
307,620.00 2007 7.80% 4,020.0 6,294.0 16.75% 26.22%
461,917.00 2008 6.50%
Market Share
Desktop Portables
Ipod
Other Music Related products & Services Iphone & Related products and Serivces Peripherals & other hardware
7,676.0
1,885.0 1,100.0
39.74%
9.76%
8,305.0
2,496.0 123.0
34.60%
10.40% 0.51% 5.25%
5.70%
1,260.0
Software, service, and other net sales Total Net Revenue Total COGS
GROSS PROFIT Gross Profit Margin Total COGS as % of Rev SGA, Operating Expenses Op Exp as % of Revenue OPERATING INCOME
1,279.0 19,315.0 13,717.00
5,598.00 28.98% 71.02% 3,145.0 16.28% $2,453.00
6.62% 100.00%
1,508.0 24,006.0 15,852.00
8,154.00 33.97% 66.03% 3,745.0 15.60% $4,409.00
6.28% 100.00% 30,045.0 21,559.95
8,485.05 71.76% 4,482.71 14.92% 4,002.33
Pro Forma Income Statement
Unusual Item OPERATING Inc After Unusual Item OTHER INCOME (EXPENSE) Interest Income Interest Expense Net Interest Income (Expense) Gain on sales of prop/equip Other Income (Expense) Net EBT Income Taxes
$2,453.00 $4,409.00
0
4,002.33
394.0 0.0 394.0 0.0 29.0 $2,818.00 $829.00 $1,989.00 $1,989.00
647 0.0 647.0 0.0 48.0 $5,008.00 $1,512.00 $3,496.00 $3,496.00
657.5624 0.0 657.6 0 48.0 4,611.90 1,385.87 3,226.02 3,226.02
EAT NET INCOME Diluted Shares EPS
Realized Tax Rates:
877.5 $2.27
29.42%
889.3 $3.93
30.19%
905.3 3.56
30.05%
Pro Forma Income Statement cont .
Relative Valuation
PE Comparable AAPL DELL
2000 12.80 47.8 0.2678 2000 12.80 32.9 0.3891 2000 12.80 35.5
2001 101.00 23.5 4.2979 2001 101.00 13.8 7.3188 2001 101.00 36.9
2002 28.00 51 0.5490 2002 28.00 22.8 1.2281 2002 28.00 45.4
2003 38.8
2004 69.30 33.5 2.0687 2004 69.30 19.5 3.5538 2004 69.30 36.9
2005 45.50 25.5 1.7843 2005 45.50 28 1.6250 2005 45.50 22.9
2006 35.90 15.8 2.2722 2006 35.90 29.3 1.2253 2006 35.90 22.9
2007 43.40 24.3 1.7860 2007 43.40 21.7 2.0000 2007 43.40 20.7
P/E 2008 41 19.8 2.0707
PE Comparable AAPL HPQ
2003
P/E 2008 41 17.3 2.3699 P/E 2008
41 17
PE Comparable AAPL MSFT
2003 40.2
0.3606
2.7371
0.6167
1.8780
1.9869
1.5677
2.0966
2.4118
P/E 2008 41 29.4 1.3946 P/E 2008 41 22.7 1.8062
PE Comparable AAPL Industry Avg.
2000 12.80 132.8 0.0964
2001 101.00 178.3 0.5665
2002 28.00 131.7 0.2126
2003 74.3
2004 69.30 81.1 0.8545
2005 45.50 45.7 0.9956
2006 35.90 36.7 0.9782
2007 43.40 65.1 0.6667
PE Comparable AAPL SP500
Relative Valuation
2000 12.80 106.9 0.1197
2001 101.00 86 1.1744
2002 28.00 56.4 0.4965
2003 44.5
2004 69.30 39.1 1.7724
2005 45.50 38.1 1.1942
2006 35.90 26.7 1.3446
2007 43.40 34.4 1.2616
Average AAPL/DELL AAPL/HPQ AAPL/MSFT AAPL/Ind Avg. AAPL/SP500 1.860829 2.477153 1.60624 0.624349 1.051916
Median 1.786008 1.625 1.878049 0.666667 1.194226
EPS (2008)1: $3.56 EPS (2008)2: $4.98 Current Price: $194.30
AAPL / AAPL / AAPL / AAPL / AAPL /
Dell Price HPQ Price MSFT Price Industry Price SP500 Price
E(price 2008) using EPS1 125.89 100.08 113.66 69.78 96.51
E(price 2008) using EPS2 176.11 140.00 159.00 97.61 135.00
Average Price Estimate
Using EPS1: Using EPS2: $ 101.18 $ 141.54
Industry Avg. / Benchmark
87.07
87.07
Relative Valuation
Absolute Valuation
FCFF Model
Costs of Capital CAPM 10 yr T-Strip: Beta: Risk Premium CAPM= k1 = 4.26% 1.442 6.50% 4.26% + 1.442(6.5%) 13.63%
Another K
HPQ Bond Outstanding: Costs of Capital YTM: Equity Premium: k2 = 5.16%
5.16% 3% 8.16%
Absolute Valuation - Cost Of Capital
FCFFStarting from CFO Operating Activities Net Income Depreciation/Depletion Depreciation Depletion Amortization Amortization of Intangibles Amortization of Acquisition Costs Deferred Taxes Non-Cash Items Accounting Change Discontinued Operations Extraordinary Item Unusual Items Purchased R&D Equity in Net Earnings (Loss) Other Non-Cash Items Changes in Working Capital
2007 3,496.0 317.0 317.0
2006 1,989.0 225.0 225.0
2005 1,328.0 179.0 179.0
2004 266.0 150.0 150.0
2003 69.0 113.0 113.0
78.0 254.0
53.0 174.0
50.0 486.0
19.0 131.0
(11.0) (1.0) (1.0) (16.0) 0.0 16.0 119.0
12.0
11.0
437.0
85.0
242.0 1,325.0
163.0 (221.0)
49.0 492.0
46.0 368.0
Accounts Receivable Inventories Prepaid Expenses Other Assets Accounts Payable Accrued Expenses Payable/Accrued Taxes Payable Other Liabilities Other Changes, Net
Other Assets & Liabilities, Net Other Operating, Net Net Cash from Operating Activities Plus: Interest Expense X (1-Tax Rate) Less Investment In Fixed Capital Free Cash Flow to the Firm
(385.0) (76.0)
(1,459.0) 1,494.0
(357.0) (105.0)
(2,666.0) 1,611.0
(121.0) (64.0)
(185.0) 328.0
(8.0) (45.0)
(201.0) 297.0
(201.0) (11.0) (34.0) (30.0) 243.0
1,751.0
1,296.0
534.0
325.0
152.0
Absolute Valuation
5,470.0 0.0 986.0 4,484.0
2,220.0 0.0 657.0 1,563.0
2,535.0 0.0 260.0 2,275.0
934.0 2.2 176.0 760.2
289.0 5.9 174.0 120.9
Geometric Avg
147%
E(FCFF) = FCFF2007 * (1+g)t
E(FCFF) 2008
5,829.20
2009
7,577.96
2010
9,851.35
2011
12,806.75
2012
16,648.78
2013
21,643.41
PV(2007)
K1: K2:
2008
5,129.85 5,389.42
2009
5,868.72 6,477.67
2010
6,714.01 7,785.66
2011
7,681.06 9,357.77
2012
8,787.39 11,247.32
2013
10,053.07 13,518.41
Sum
44,234.11 53,776.26
Absolute Valuation
E(FCFF)2014 = FCFF20013 * (1+g)
FCFF MODEL=E(FCFF1)/k-g Using k1 E(FCFF2014) 4484.000 est(IV2013)1 21859.846 est(IV2013)2 22076.280 est(IV2013)3 22292.714 est(IV2013)4 22509.148 est(IV2013)5 22725.582 est(IV2013)6 22942.016 est(IV2013)7 23158.450 est(IV2013)8 23374.884 est(IV2013)9 23591.319 est(IV2013)10 23807.753 est(IV2013)11 Using E(FCFF2014) 4484.000 21859.846 22076.280 22292.714 22509.148 22725.582 22942.016 23158.450 23374.884 23591.319 23807.753 k1 0.1363 0.1363 0.1363 0.1363 0.1363 0.1363 0.1363 0.1363 0.1363 0.1363 0.1363 k2 0.0816 0.0816 0.0816 0.0816 0.0816 0.0816 0.0816 0.0816 0.0816 0.0816 0.0816 g 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.1 g 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.1 est(IV2013) 32,898.019 173,078.746 189,821.838 209,715.088 233,739.855 263,332.354 300,681.733 349,297.894 415,184.449 509,531.719 655,860.956 est(IV2013) 54950.980 305305.107 358381.165 432029.339 541085.289 719163.992 1062130.382 1996418.135 14609302.800 -2808490.309 -1293899.604 est(IV2007) 15283.10891 80405.48963 88183.663 97425.27445 108586.2237 122333.7197 139684.7533 162269.8845 192878.1529 236708.1355 304686.8689 est(IV2007) 34322.22 190692.7 223843.8 269844.3 337960.3 449187.7 663403.5 1246957 9124927 -1754175 -808166
est(IV2013)1 est(IV2013)2 est(IV2013)3 est(IV2013)4 est(IV2013)5 est(IV2013)6 est(IV2013)7 est(IV2013)8 est(IV2013)9 est(IV2013)10 est(IV2013)11
Absolute Valuation
Terminal Value
Scenario One: 0 Growth Rate PV with 0 Growth Rate PV(2007) 2008 K1: 3,946.04 K2: 4,145.71
2009 3,472.62 3,832.94
2010 3,055.99 3,543.77
2011 2,689.35 3,276.41
2012 2,366.70 3,029.23
2013 2,082.76 2,800.69
Sum $17,613.45 $20,628.76
Firm Value Using 0 Growth Rate K1: E(Price 2007): $ K2: E(Price 2007): $
36.99 61.79 Scenario Seven: 6% Growth Rate K1: E(Price 2007): $ 206.81 K2: E(Price 2007): $ 806.45 Scenario Eight: 7% Growth Rate K1: E(Price 2007): $ 232.21 K2: E(Price 2007): $ 1,462.65 Scenario Nine: 8% Growth Rate K1: E(Price 2007): $ 266.63 K2: E(Price 2007): $10,321.27 Scenario Ten: 9% Growth Rate K1: E(Price 2007): $ 315.91 K2: E(Price 2007): $ (1,912.06)
Scenario two: 1% Growth Rate K1: E(Price 2007): $ 140.15 K2: E(Price 2007): $ 274.90 Scenario Three: 2% Growth Rate K1: E(Price 2007): $ 148.90 K2: E(Price 2007): $ 312.18 Scenario Four: 3% Growth Rate K1: E(Price 2007): $ 159.29 K2: E(Price 2007): $ 363.90 Scenario Five: 4% Growth Rate K1: E(Price 2007): $ 171.84 K2: E(Price 2007): $ 440.50
Scenario Six: 5% Growth Rate K1: E(Price 2007): $ 187.30 K2: E(Price 2007): $ 565.57
Scenario Eleven: 10% Growth Rate K1: E(Price 2007): $ 392.35 K2: E(Price 2007): $ (848.30)
Absolute Valuation
Recommendation
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