NewFangled Sports Products, Inc.
Valuation of Stock
Value of Stock Based on Dividend Payments
Projected
FYE FYE FYE FYE FYE
Terminal
Current Year CY+1 CY+2 CY+3 CY+4 Year
Expected Dividend Payment Per Share $1.00 $1.10 $1.15 $1.20 $1.30 $1.40
12.39920532
Present Value – Cash Flow/Terminal Value
$1.00 $0.99 $0.93 $0.87 $0.85 $12.72
Net Present Value $17.36 $5
Notes:
(a) Reflects end-of-year discounting convention.
(c) Based upon estimated long term cash flow growth rate of the economy in general.
(d) Terminal Value = (Terminal Year Cash Flow / (Discount Rate – Perpetual Growth Rate))
(a) Discount Factor 1.0000 0.8993 0.8087 0.7273 0.6540 0.6540
Workpaper I
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Present Value Factors
Valuation Date
First Year of Projections
Projected
Stub period #REF! #REF! #REF! #REF! #REF! #REF!
#REF! #REF! #REF! #REF! #REF! #REF!
Days in year 364 365 365 365 364
DRAFT
16.0% 17.0% 18.0% 19.0% 20.0%
$2,231 $2,042 $1,877 $1,732 $1,605
$2,293 $2,094 $1,921 $1,770 $1,636
$2,360 $2,149 $1,967 $1,809 $1,670
$2,431 $2,208 $2,017 $1,851 $1,706
$2,509 $2,272 $2,070 $1,896 $1,744
Prior period 0364 729 1,094 1,458
Divided by 2 (mid-period) 182 546.5 911.5 1276.5 1640.5
Over 365 (Discount period) 0.4986 1.4973 2.5 3.5 4.5
Discount rate
NewFangled Sports Products, Inc.
Valuation of Stock
Value of Stock Based on Dividend Payments
Projected
FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE
Current Year CY+1 CY+2 CY+3 CY+4 CY+5 CY+6 CY+7 CY+8 CY+9 CY+10 CY+11 CY+12 CY+13 CY+14 CY+15
Expected Dividend Payment Per Share $1.00 $1.03 $1.06 $1.09 $1.13 $1.16 $1.19 $1.23 $1.27 $1.30 $1.34 $1.38 $1.43 $1.47 $1.51 $1.56
#REF!
Present Value – Cash Flow/Terminal Value $1.00 $0.92 $0.85 $0.78 $0.72 $0.66 $0.60 $0.56 $0.51 $0.47 $0.43 $0.40 $0.37 $0.34 $0.31 $0.28
Net Present Value $9.19 $9
Notes:
Workpaper I
Present Value Factors
Valuation Date
First Year of Projections
Projected
Stub period #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF!
#REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF! #REF!
Days in year 364 365 365 365 365 365 365 365 365 365 365 365 365 365 365 364
Stub 364 729 1,094 1,459 1,824 2,189 2,554 2,919 3,284 3,649 4,014 4,379 4,744 5,109 5,474 5,838
Prior period 0 364 729 1,094 1,459 1,824 2,189 2,554 2,919 3,284 3,649 4,014 4,379 4,744 5,109 1,458
Total 364 1,093 1,823 2,553 3,283 4,013 4,743 5,473 6,203 6,933 7,663 8,393 9,123 9,853 10,583 7,296
Divided by 2 (mid-period) 182 546.5 911.5 1276.5 1641.5 2006.5 2371.5 2736.5 3101.5 3466.5 3831.5 4196.5 4561.5 4926.5 5291.5 3648
Over 365 (Discount period) 0.4986 1.4973 2.5 3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5 11.5 12.5 13.5 14.5 10.0
Discount rate
Discount Period in Years 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 11.00 12.00 13.00 14.00 15.00
NewFangled Sports Products, Inc.
Valuation of Stock
Value of Stock Based on Dividend Payments
Projected
FYE Terminal
Current Year Year
Expected Dividend Payment Per Share $1.00 $1.03
Net Present Value $12.44
Notes:
(a) Reflects end-of-year discounting convention.
(b)
Based upon the Cost of Equity Capital as reported in Ibbotson’s Cost of Capital Yearbook (data through June 2006) for SIC 3949.
(c) Terminal Value = (Terminal Year Cash Flow / (Discount Rate – Perpetual Growth Rate))
Workpaper I
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Present Value Factors
Valuation Date
First Year of Projections
Projected
Stub period #REF!
#REF!
Days in year 364 #REF!
Prior period 0
Divided by 2 (mid-period) 182
Over 365 (Discount period) 0.4986
Discount rate
#REF!
#REF! DRAFT
Sensitivity Table
Discount Rates
15.0% 16.0% 17.0% 18.0% 19.0% 20.0%
Growth Rates 2.0% $2,451 $2,231 $2,042 $1,877 $1,732 $1,605
Discount Period in Years 0.00
Present Value – Cash Flow/Terminal Value $1.00 $11.44
Free Cash Flows
Discount Period in Years 0.00 1.00 2.00