Credit Suisse Investment Banking Pitch Book
CONFIDENTIAL
WACC Analysis - Iverson
Assumptions
Tax Rate
Risk Free Rate (20 year)"
Equity Risk Premium
Debt Sensitivity
Industry Statistics
SDS
ADP
FISV
DST
SEXC
BSG
CME
FDS
AX
Cost of Captal
0.0% 0.0%
5.0% 53%
Average
10.0% 11.1%
15.0% 17.6%
20.0% 25.0%
25.0% 33.3%
30.0% 42.9%
35.0% 53.8%
40.0% 68.7%
45.0% 81.8%
50.0% 100.0%
1.11
1.11
1.11
1.11
1.11
1.11
1.11
1.11
1.11
1.11
40.00%
4.72%
7.20%
0.50%
Debt! Debl
Average Lev.
Capital Equity Unler. Beta Factor
Beta
CREDIT FIRST
SUISSE BOSTON
1.04
0.89
0.92
0.96
1.28
1.15
1.62
1.13
1.47
1.00
1.03
1.07
1.11
1.15
1.20
1.26
1.32
1.40
1.49
1.60
Debt/
Mit Eq
7.5%
0.3%
8.3%
44.3%
0.4%
22.3%
0.0%
0.0%
0.2%
9.2%
Levered
Beta"
scouter
Levering Unlevered Cost of
Eactor M
Beta
Equity
1.05
1.00
1.05
1.27
1.00
1.13
1.00
1.00
1.00
Cost of
Pre-tax Cost of Debt
After-tax Cost of Debt
Equity
1.11
12.7%
1.15
13.0 %
1.19
13.3 %
1.23 13.6%
1.28 13.9%
1.34 14.3 %
1.40
14.6%
1.47
15.3%
1.56 15.9%
1.66 16.7%
1.78
17.5%
0.99
0.89
0.88
0.76
1.27
1.01
1.82
1.13
1.46
1.11
Debt
pued yeld on the 20yar US Tsary bond 150
(2) The awageur pead bobonteretana stocks and kebobons)
amal Equty Bets Bock predictions
1) covang Fator 11
(k ta (DecaLivering Factor)
Le B (Bers Levereg Factor
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
11.9%
11.1%
11.0%
10.2%
13.9%
12.0%
16.4%
12.8 %
15.3%
12.7%
Size
Premium
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
5.0% 55% 6.0% 6.5%
3.0% 3.3% 3.6%
3.9%
7.0%
7.0 % 75 %
4.2% 4.5 %
8.0%
4.8 %
8.5%
5.1%
(1) Cest of Eauty Rt B-Rr+ScPm
WACC RS Ruon Dete
Re Returs on Earty
[R] [DD-]-[RLE/00+011
0 Source 2004 heerson 50B Yeatook
9.0% 9.5% 10.0%
5,4 % 5.7% 6.0%
WEIGHTED AVERAGE COST OF CAPITAL"
12.7% 12.7% 12.7% 12.7% 12.7% 12.7% 12.7% 12.7% 12.7%
12.5% 12.5% 12.5% 12.5% 12.5% 12.6% 12.6% 12.6% 12.6%
12.2 % 12.3% 12.3% 12.3% 12.4% 12.4% 12.4% 12.5%
12.0% 12.0% 12.1% 12.1% 12.2% 12.2% 12.3% 12.3%
11.7% 11.8 % 11,9% 11.9% 12.0% 12.0% 12.1% 12.2 %
11.5% 11.6% 11.7% 11.7% 11.8% 11.9% 12.0% 12.0%
11.3% 11.3 % 11,4% 11.5% 11.6% 11.7% 11.3% 11.9 %
11.0% 11.1% 11.2% 11.3% 11.4% 11.5% 11.6%
11.6% 11.7% 11.9 % 12.0% 12.1%
10.8 % 10.0% 11.0% 11.1% 11.2% 11.4% 11.5% 11.5% 11.7% 11.8% 12.0%
10.5% 10.7% 10.8 % 10.9% 11.1% 11.2% 11.3% 11.5% 11.6% 11.7% 11.9%
10.3% 10.4 % 10.6 % 10.7% 10.9% 11.0% 11.2% 11.3% 11.5% 11.6% 11.8%
12.7% 12.7%
12.6 % 12.6%
12.5% 12.5% 12.5%
12.4% 12.4% 12.4%
12.2% 12.3% 12.3%
12.1% 12.2% 12.3%
12.0% 12.1% 12.2%
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