J.P.Morgan Investment Banking

APPENDIX WACC analysis WACC calculation Risk free rate Unlevered Beta Levered Beta Equity risk premium Cost of equity (Re) Pre-tax cost of debt (YTW) (Rd) Effective tax rate Post-tax cost of debt Target debt/total capital Target debt /equity WACC WACC (rounded) Leverage (8 of TMC) Debt Equity Debt/equity JPMorgan 4.74% 1.30 1.75 4.24% 12.16% 6.55% 0.0% 6.55% 35.0% 53.8% 10. 20% 10. 20% 35.0% 35.0 65.0 53.8% Estimated peer beta analysis Company MGM Mirage Harrah's Entertainment Wynn Resorts Las Vegas Sands Gaylord Entertainment Orient Express Hotels Starwood Hotels & Resorts Hilton Hotels Mean Median Beta 1.50 Predicted beta 1.50 1.25 1.75 1.60 1.50 1.50 1.25 1.25 1.75 2.00 WACC sensitivity by beta and cost of debt 6.05% 9.33% 10.02% 1.45 1.50 10.71% Total debt $12,271 10,596 NM NM 582 558 3,180 8,193 6.30% 9.42% 10.11% 5,897 5,687 10.80% Equity mkt. cap 11,247 13,166 NM NM 1,883 1,407 15,440 9,863 8,834 10,555 Cost of debt 6.55% 9.51% 10.20% 10.89% Debt/ capital 52% 45% NM NM 24% 28% 17% 45% 35% 37% 6.80% 9.60% 10.29% 10.97% Tax rate 35% 35% NM NM 35% 35% 35% 35% 35% 35% Unlevered beta 1.12 0.97 NM NM 1.30 1.27 1.13 0.97 1.12 1.12 7.05% 9.68% 10.37% 11.06% PROJECT PLATO 32

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