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Revenue Growth 10%
Terminal Growth Rate 3%
WACC 11.41%
Income Tax 30%
Cost of Debt 10.00%
Depriciation & Amortization 9,943 per year
Bankruptcy Cost(% of Firm Value) 25%
Probability of Distrees 10%
CAPEX (% of Revenue) 18.00%
CNWC (% of Revenue) 6.00%
Operating Expenses 40.00%
Selling & Adminstration Expense 15.00%
2004 2005 2006
(31/30/1997) Projected Projected
0 0.25 1.25
Sales 113,459 124804.90 137285.39
Less: Operating Expenses 49921.96 54914.16
Less: Depreciation & Amortization 9943.00 9943.00
Less: Sell. Gen. & & Admin. Exp. 18720.74 20592.81
EBIT 46219.21 51835.43
Less: Interest Expense 2390.00 2390.00
EBT 43829.21 49445.43
Less: Corporate Tax 13148.76 14833.63
NOPAT 30680.44 34611.80
Plus: Depreciation & Amortization 9943.00 9943.00Less/ Add: Change in NWC 7488.29 8237.12Less: Capital Expenditure 22464.882 24711.3702FCFF 10670.27 11606.30PV of FCFF 10385.90304 10140.01817Enterprise Value 165789.6502Add:Cah and Marketable Securities $10,595
Less: Interest Bearing Debt 23900.00Less: Bankruptcy Cost 4144.74Equity Value $148,339,908.96Total number of shares Outstanding 12462000Value per Share $11.90
Assumptions
Skewness
Kurtosis
Minimum
Maximum
(in $ 000s)
2007 2008 2009 Risk free Rate
Projected Projected Projected Terminal Value Market Return
2.25 3.25 4.25 4.25 Beta
151013.93 166115.32 182726.85 Cost of Equity
60405.57 66446.13 73090.74 Cost of Debt
9943.00 9943.00 9943.00 After Tax cost of debt
22652.09 24917.30 27409.03 Weight ot Debt
58013.27 64808.89 72284.08 Weight of Equity
2390.00 2390.00 2390.00 Total Debt
55623.27 62418.89 69894.08 Total Market Value of Equity
16686.98 18725.67 20968.23 Total Value(Debt+ Equity)
38936.29 43693.23 48925.86 Income Tax
9943.00 9943.00 9943.00 WACC
9060.84 9966.92 10963.61
27182.50722 29900.75794 32890.83374
12635.94 13768.55 15014.41
9908.965668 9691.357464 9485.945996 116177.4599
Forecast: Value per Share
Statistic Forecast values
Trials 10,000
Mean $12.01
Median $11.96
Mode '---
Standard Deviation $2.66
Variance $7.05
Skewness 0.1762
Kurtosis 2.89
Coeff. of Variability 0.2211
Minimum $4.03
Maximum $23.11
Mean Std. Error $0.03
5.00%
12%
1.25
13.75%
10.00%
7.00%
0.34624634
0.65375366
23900
45126
69026
30%
11.41%
Revenue Growth 15%
Terminal Growth Rate 3%
WACC 11.94%
Income Tax 30%
Cost of Debt 10.00%
Depriciation & Amortization 9,943 per year
Bankruptcy Cost(% of Firm Value) 25%
Probability of Distrees 5% 1
CAPEX (% of Revenue) 18.00% 2
CNWC (% of Revenue) 6.00% 3
Operating Expenses 40.00% 4
Selling & Adminstration Expense 15.00%
Flotation Cost 1224.00
2004 2005 2006
(31/30/1997) Projected Projected
0 0.25 1.25
Sales 113,459 130477.85 150049.53
Less: Operating Expenses 52191.14 60019.81
Less: Depreciation & Amortization 9943.00 9943.00
Less: Sell. Gen. & & Admin. Exp. 19571.68 22507.43
EBIT 48772.03 57579.29
Less: Interest Expense 2390.00 2390.00
EBT 46382.03 55189.29
Less: Corporate Tax 13914.61 16556.79
NOPAT 32467.42 38632.50
Plus: Depreciation & Amortization 9943.00 9943.00Less/ Add: Change in NWC 7828.67 9002.97Less: Capital Expenditure 23486.013 27008.91495FCFF 11095.74 12563.61PV of FCFF 10787.22897 10911.46279Enterprise Value 186828.2959Add:Cah and Marketable Securities $44,795
Less: Interest Bearing Debt 23900.00Less: Bankruptcy Cost 2335.35Flotation Cost 1224.00Equity Value $205,387,942.21
Total number of shares Outstanding 15862000Value per Share $12.95
Forecast: Value per Share
Statistic Forecast values
Trials 10,000
Assumptions
IPO
Mean $12.00
Median $11.93
Mode '---
Standard Deviation $2.64
Variance $6.98
Skewness 0.1864
Kurtosis 2.92
Coeff. of Variability 0.2202
Minimum $3.54
Maximum $23.41
Mean Std. Error $0.03
Debt 23900 Debt 23900
Equity 45126 Equity (45126+61200)
Debt Ratio 35% Debt Ratio
Equity Ratio 65% Equity Ratio
No. of Shares (12462000+3400000)
Repay 3400 shares of Hogg Robinson and Sabre at $9 each by the amount of $30600
(in $ 000s)
2007 2008 2009
Projected Projected Projected Terminal Value
2.25 3.25 4.25 4.25
172556.96 198440.50 228206.58
69022.78 79376.20 91282.63
9943.00 9943.00 9943.00
25883.54 29766.08 34230.99
67707.63 79355.23 92749.96
2390.00 2390.00 2390.00
65317.63 76965.23 90359.96
19595.29 23089.57 27107.99
45722.34 53875.66 63251.97
9943.00 9943.00 9943.00
10353.42 11906.43 13692.39
31060.25219 35719.29002 41077.18352
14251.67 16192.94 18425.39
11057.29458 11223.37326 11408.51787 131440.4184
At Share Price of $9 each
Use remaining proceeds of 30600(61200-30600) in expansion
IPO
Before After
No. of New Shares Issued 6.8 million @ $9
Raise $61200( 9*6800) from IPO
23900
106326
18%
82%
15862000
Risk free Rate 5.00%
Market Return 12%
Beta 1.15
Cost of Equity 13.05%
Cost of Debt 10.00%
After Tax cost of debt 7.00%
Weight ot Debt 0.1835271
Weight of Equity 0.8164729
Total Debt 23900
Total Market Value of Equity 106326
Total Value(Debt+ Equity) 130226
Income Tax 30%
WACC 11.94%
At Share Price of $9 each
Use remaining proceeds of 30600(61200-30600) in expansion
After
No. of New Shares Issued 6.8 million @ $9
Raise $61200( 9*6800) from IPO
Revenue Growth 15%
Terminal Growth Rate 3%
WACC 10.28%
Income Tax 30%
Cost of Debt 11.00%
Depriciation & Amortization 9,943 per year
Bankruptcy Cost(% of Firm Value) 25%
Probability of Distrees 50%
CAPEX (% of Revenue) 18.00%
CNWC (% of Revenue) 6.00%
Operating Expenses 40.00%
Selling & Adminstration Expense 15.00%
Flotation Cost 1224.00
2004 2005 2006
(31/30/1997) Projected Projected
0 0.25 1.25
Sales 113,459 130477.85 150049.53
Less: Operating Expenses 52191.14 60019.81
Less: Depreciation & Amortization 9943.00 9943.00
Less: Sell. Gen. & & Admin. Exp. 19571.68 22507.43
EBIT 48772.03 57579.29
Less: Interest Expense 9361.00 9361.00
EBT 39411.03 48218.29
Less: Corporate Tax 11823.31 14465.49
NOPAT 27587.72 33752.80
Plus: Depreciation & Amortization 9943.00 9943.00Less/ Add: Change in NWC 7828.67 9002.97Less: Capital Expenditure 23486.013 27008.91495FCFF 6216.04 7683.91PV of FCFF 6065.820071 6799.258933Enterprise Value 163996.6508Add:Cah and Marketable Securities $44,795
Less: Interest Bearing Debt 85100.00Less: Bankruptcy Cost 20499.58Flotation Cost 1224.00Equity Value $103,192,069.48
Total number of shares Outstanding 9062000Value per Share $11.39
Forecast: Value per Share
Statistic Forecast values
Trials 10,000
Debt
Assumptions
Mean $13.00
Median $12.92
Mode '---
Standard Deviation $2.49
Variance $6.19
Skewness 0.1676
Kurtosis 2.93
Coeff. of Variability 0.1915
Minimum $5.20
Maximum $22.92
Mean Std. Error $0.02
Debt 23900 Debt (23900+61200)
Equity 45126 Equity 45126
Debt Ratio 35% Debt Ratio
Equity Ratio 65% Equity Ratio
No. of Shares (12462000-3400000)
1
2 Repay 3400 shares of Hogg Robinson and Sabre at $11 each by the amount of $37400
3
(in $ 000s)
2007 2008 2009
Projected Projected Projected Terminal Value
2.25 3.25 4.25 4.25
172556.96 198440.50 228206.58
69022.78 79376.20 91282.63
9943.00 9943.00 9943.00
25883.54 29766.08 34230.99
67707.63 79355.23 92749.96
9361.00 9361.00 9361.00
58346.63 69994.23 83388.96
17503.99 20998.27 25016.69
40842.64 48995.96 58372.27
9943.00 9943.00 9943.00
10353.42 11906.43 13692.39
31060.25219 35719.29002 41077.18352
9371.97 11313.24 13545.69
7519.920797 8231.376054 8936.964108 126443.3109
Use remaining proceeds of 23800(61200-37400) in expansion
Debt
Before After
Raise $61200 through debt issuance
85100
45126
65%
35%
9062000
Repay 3400 shares of Hogg Robinson and Sabre at $11 each by the amount of $37400
Risk free Rate 5.00%
Market Return 12%
Beta 1.45
Cost of Equity 15.15%
Cost of Debt 11.00%
After Tax cost of debt 7.70%
Weight ot Debt 0.65347934
Weight of Equity 0.34652066
Total Debt 85100
Total Market Value of Equity 45126
Total Value(Debt+ Equity) 130226
Income Tax 30%
WACC 10.28%
Use remaining proceeds of 23800(61200-37400) in expansion
After
Raise $61200 through debt issuance
Revenue Growth 15%
Terminal Growth Rate 3%
WACC 12.04%
Income Tax 30%
Cost of Debt 10.00%
Depriciation & Amortization 9,943 per year
Bankruptcy Cost(% of Firm Value) 25%
Probability of Distrees 5% 1
CAPEX (% of Revenue) 18.00% 2
CNWC (% of Revenue) 6.00% 3
Operating Expenses 40.00% 4
Selling & Adminstration Expense 15.00%
Flotation Cost 612.00
2004 2005 2006
(31/30/1997) Projected Projected
0 0.25 1.25
Sales 113,459 130477.85 150049.53
Less: Operating Expenses 52191.14 60019.81
Less: Depreciation & Amortization 9943.00 9943.00
Less: Sell. Gen. & & Admin. Exp. 19571.68 22507.43
EBIT 48772.03 57579.29
Less: Interest Expense 2390.00 2390.00
EBT 46382.03 55189.29
Less: Corporate Tax 13914.61 16556.79
NOPAT 32467.42 38632.50
Plus: Depreciation & Amortization 9943.00 9943.00Less/ Add: Change in NWC 7828.67 9002.97Less: Capital Expenditure 23486.013 27008.91495FCFF 11095.74 12563.61PV of FCFF 10784.82116 10899.29053Enterprise Value 184769.438Add:Cah and Marketable Securities $47,995
Less: Interest Bearing Debt 23900.00Less: Bankruptcy Cost 2309.62Flotation Cost 612.00Equity Value $206,554,820.02
Total number of shares Outstanding 15862000Value per Share $13.02
Forecast: Value per Share
Statistic Forecast values
Trials 10,000
Private Placement
Assumptions
Mean $13.06
Median $12.98
Mode '---
Standard Deviation $2.46
Variance $6.05
Skewness 0.2122
Kurtosis 2.99
Coeff. of Variability 0.1884
Minimum $5.76
Maximum $23.02
Mean Std. Error $0.02
Debt 23900 Debt 23900
Equity 45126 Equity (45126+74800)
Debt Ratio 35% Debt Ratio
Equity Ratio 65% Equity Ratio
No. of Shares (12462000+3400000)
Repay 3400 shares of Hogg Robinson and Sabre at $11 each by the amount of $37400
(in $ 000s)
2007 2008 2009
Projected Projected Projected Terminal Value
2.25 3.25 4.25 4.25
172556.96 198440.50 228206.58
69022.78 79376.20 91282.63
9943.00 9943.00 9943.00
25883.54 29766.08 34230.99
67707.63 79355.23 92749.96
2390.00 2390.00 2390.00
65317.63 76965.23 90359.96
19595.29 23089.57 27107.99
45722.34 53875.66 63251.97
9943.00 9943.00 9943.00
10353.42 11906.43 13692.39
31060.25219 35719.29002 41077.18352
14251.67 16192.94 18425.39
11035.10159 11190.84974 11365.3048 129494.0702
At Share Price of $11 each
Use remaining proceeds of 37400(74800-37400) in expansion
Private Placement
Before After
No. of New Shares Issued 6.8 million @ $11
Raise $74800( 11*6800) from IPO
23900
119926
17%
83%
15862000
Risk free Rate 5.00%
Market Return 12%
Beta 1.15
Cost of Equity 13.05%
Cost of Debt 10.00%
After Tax cost of debt 7.00%
Weight ot Debt 0.16617301
Weight of Equity 0.83382699
Total Debt 23900
Total Market Value of Equity 119926
Total Value(Debt+ Equity) 143826
Income Tax 30%
WACC 12.04%
At Share Price of $11 each
Use remaining proceeds of 37400(74800-37400) in expansion
After
No. of New Shares Issued 6.8 million @ $11
Raise $74800( 11*6800) from IPO
Revenue Growth 15%
Terminal Growth Rate 3%
WACC 11.94%
Income Tax 30%
Cost of Debt 10.00%
Depriciation & Amortization 9,943 per year
Bankruptcy Cost(% of Firm Value) 25%
Probability of Distrees 5%
CAPEX (% of Revenue) 18.00%
CNWC (% of Revenue) 6.00%
Operating Expenses 40.00%
Selling & Adminstration Expense 15.00%
Flotation Cost 1224.00
2004 2005 2006
(31/30/1997) Projected Projected
0 0.25 1.25
Sales 113,459 130477.85 150049.53
Less: Operating Expenses 52191.14 60019.81
Less: Depreciation & Amortization 9943.00 9943.00
Less: Sell. Gen. & & Admin. Exp. 19571.68 22507.43
EBIT 48772.03 57579.29
Less: Interest Expense 2390.00 2390.00
EBT 46382.03 55189.29
Less: Corporate Tax 13914.61 16556.79
NOPAT 32467.42 38632.50
Plus: Depreciation & Amortization 9943.00 9943.00Less/ Add: Change in NWC 7828.67 9002.97Less: Capital Expenditure 23486.013 27008.91495FCFF 11095.74 12563.61PV of FCFF 10787.22897 10911.46279Enterprise Value 292178.1847Add:Cah and Marketable Securities $44,795
Less: Interest Bearing Debt 23900.00Less: Bankruptcy Cost 3652.23Flotation Cost 1224.00Equity Value $309,420,957.43
Total number of shares Outstanding 15862000Value per Share $19.51
Forecast: Value per Share
Statistic Forecast values
Trials 10,000
IPO (waiting)
Assumptions
Mean $19.63
Median $19.53
Mode '---
Standard Deviation $2.50
Variance $6.27
Skewness 0.183
Kurtosis 2.91
Coeff. of Variability 0.1275
Minimum $11.98
Maximum $29.67
Mean Std. Error $0.03
Debt 23900 Debt 23900
Equity 45126 Equity (45126+61200)
Debt Ratio 35% Debt Ratio
Equity Ratio 65% Equity Ratio
No. of Shares (12462000+3400000)
(in $ 000s)
2007 2008 2009
Projected Projected Projected Terminal Value
2.25 3.25 4.25 4.25
172556.96 198440.50 228206.58
69022.78 79376.20 91282.63
9943.00 9943.00 9943.00
25883.54 29766.08 34230.99
67707.63 79355.23 92749.96
2390.00 2390.00 2390.00
65317.63 76965.23 90359.96
19595.29 23089.57 27107.99
45722.34 53875.66 63251.97
9943.00 9943.00 9943.00
10353.42 11906.43 13692.39
31060.25219 35719.29002 41077.18352
14251.67 16192.94 18425.39
11057.29458 11223.37326 11408.51787 131440.4184
IPO (waiting)
Before After
No. of New Shares Issued 6.8 million @ $9
23900
106326 Current Asset Value S 165789.65
18% Exercise (Strike) Price X 61200
82% Time to Maturity (Years) T 0.25
15862000 rf 0.05
s 0.05
105349.889
Risk free Rate 5.00%
Market Return 12%
Beta 1.15
Cost of Equity 13.05%
Cost of Debt 10.00%
After Tax cost of debt 7.00%
Weight ot Debt 0.1835271
Weight of Equity 0.8164729
Total Debt 23900
Total Market Value of Equity 106326
Total Value(Debt+ Equity) 130226
Income Tax 30%
WACC 11.94%
After
No. of New Shares Issued 6.8 million @ $9
Option Pricing
Riskless Interest Rate (% p.a.)
Volatility (% p.a.)
Call Value ($)
d1 40.37541
d2 40.35041
N(d1) 1
N(d2) 1
Option Pricing
