Pershing Square Activist Presentation Deck
A. Pershing's Proposal: Assumptions
We estimated the asset betas of several Real Estate holding C-Corporations and several
high branded intellectual property businesses.
High Branded Intangible Property Business Betas
(Dollar values in millions)
Company
Coca Cola Co.
Pepsico Inc.
Choice Hotels
Mean
Median
Company
British Land
Brookfield Properties
Forest City Enterprises
Land Securities
Adjusted
Equity
Beta
Mean
Median
0.49
0.46
0.86
Real Estate Business Betas
(Dollar values in millions)
0.60
0.49
PF McDonald's: Cost of Capital
Adjusted
Equity
Beta
0.62
0.80
0.66
0.55
0.66
0.64
Cost of
Equity
7.3%
7.2%
9.3%
7.9%
7.3%
Cost of
Equity
8.0%
9.0%
8.2%
7.7%
8.2%
8.1%
Equity
Value
$101,776.1
99,498.9
2,285.7
$67,853.6
99,498.9
Equity
Value
$8,913.9
6,805.9
3,863.9
12,279.2
Note: Market information as of 11/10/05. Utilized treasury stock method.
Sources: Barra, company reports, Factset, and Wall Street Equity research.
$7,965.7
7,859.9
Total
Debt
$4,200.0
4,607.0
296.7
65
$3,034.6
4,200.0
Total
Debt
$11,391.1
6,208.0
5,566.0
6,484.2
$7,412.3
6,346.1
Preferred
Stock
41.0
$13.7
Preferred
Stock
1,477.0
$369.3
Marginal
Tax Unlevered
Rate
38.0%
38.0%
38.0%
38.0%
38.0%
Marginal
Tax
Rate
38.0%
38.0%
38.0%
38.0%
38.0%
38.0%
Beta
0.48
0.45
0.79
0.57
0.48
Unlevered
Beta
0.34
0.45
0.35
0.42
0.39
0.38
Total Debt &
Preferred /
TEV
4.2%
4.7%
11.7%
6.8%
4.7%
Total Debt &
Preferred /
TEV
56.8%
60.5%
59.3%
34.6%
52.8%
58.0%View entire presentation