Credit Suisse Investment Banking Pitch Book
CONFIDENTIAL
WACC Analysis - Allen
Assumptions
Tax Rate
Risk Free Rate (20 year)"
Equity Risk Premium
Debt Sensitivity
Industry Statistica
SDS
IBM
HPQ
ACN
EDS
CSC
ACS
Cost of Captal
Average
0.0% 0.0%
5.0% 5.3%
10.0% 11.1%
15.0% 17.6 %
1.02
20.0% 25.0%
1.02
25.0% 33.3% 1.02
30.0% 42.9% 1.02
35.0% 53.8% 1.02
40.0% 65.7% 1.02
45.0% 81.8% 1.02
1.02
50.0% 100.0%
40.00%
4.72%
7.20%
0.50%
1.02
1.02
1.02
Beta
Debt/ Debt/ Average Lev.
Capital Equity Unler. Beta Eactor
CREDIT FIRST
SUISSE BOSTON
1.04
0.98
1.27
1.06
1.14
1.19
1.10
1.00
1.03
1.07
1.11
1.15
1.20
1.26
1.32
1.40
1.49
Debt /
Mat EQ.
7.5%
16.4%
12.3%
5.1%
39.9%
27.3%
3.9%
16.0%
Levered
Beta"
Levering Unlevered Cost of
Eactor"
Bela
Equity
1.05
1.10
1.07
1.03
1.24
1.16
1.02
Pre-tax Cost of Debt
After-tax Cost of Debt
BaaS Eaty Bite Bock predictions
i Long Factor 1 (1o) (derrami
v
(Boca Lavaring Factor)
its Love Box (Bars Lovering Fact
Cost of
Equity"
1.02 12.0%
1.05
12.3%
1.08 12.5%
1.12 12.8%
1.17
13.1%
1.22 13.5%
1.20
13.9%
1.35 14.4%
1.42
15.0%
1.52
15.6 %
16.4%
0.99
0.90
1.18
1.02
0.92
1,02
1.08
1.02
Debt!
Capital
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
yed on the 20 US Trearybend 00L
(2) The average store spread between the tam ce stocks and costs (botons)
35.0%
40.0%
45.0%
50.0%
11.9%
11.2%
13.2%
12.1%
11.3%
12.1%
12.5%
12.0%
Size
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5.0% 5.5% 50% 65% 7.0% 75% 80% 8.5 %
30% 3.3% 3,6% 3.9% 4.2 % 45 % 4.8% 5.1%
WEIGHTED AVERAGE COST OF CAPITAL"
12.0% 12.0%
12.0% 12.0% 12.0% 12.0% 12.0% 12.0%
12.0% 12.0% 12.0% 12.0%
12.0% 12.0% 12.0%
11.8% 11.8 % 11.8% 11.9% 11.9% 11,9% 11.9% 11.9% 11.9% 11.9% 12.0%
11.6% 11.6% 11.6% 11.7% 11.7% 11.7% 11.3% 11.8% 11.8% 11.8% 11.9%
11.3% 11.4 % 11.4% 11.5% 11.5% 11.6 % 11.6% 11.7% 11.7% 11.7% 11.8%
11.1% 11.2% 11.2% 11.3% 11.4% 11.4% 11.5% 11.5% 11.6% 11.7% 11.7%
10.9% 11.0% 11.0% 11.1 % 11.2% 11.3% 11.3% 11.4% 11.5% 11.6% 11.6%
10.6 % 10.7% 10.8% 10.9% 11.0% 11.1% 11.2% 11.3% 11.4% 11.5% 11.5%
10.5% 10.6% 10.7% 10.8 % 10.9% 11.0% 11.1% 11.3% 11.4% 11.5%
10.3 % 10.4% 10.5% 10.7% 10.8 % 10.9 % 11.0% 11.1% 11.3% 11,4%
10.1% 10.2 % 10.4% 10.5% 10.6 % 10.8% 10.9% 11.0% 11.2 % 11.3%
10.2% 10.3 % 10.5% 10.6% 10.8% 10.9% 11.1% 11.2%
10.4 %
10.2 %
9.9%
9.7% 9.9% 10.0%
(1) Ost of Eaty RB-R-Szer
WACC Rec
90% 9.5 % 10.0%
5.4% 5.7% 6.0%
Re Rus on Eart
[Rd1-axt] [DD-E] [[EE]
el Souns 2004 to 50B Yeatook
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