M10-05-General4-StageModel

Model10-05AGeneral4-StageModel(RevenueGrowthModel)RevenuePeriod0(R0)$1,000Stage1Stage2Stage3Stage4NumberofPeriods(n)5105¥GrowthRateofRevenues(g)55.6%33.0%5.0%3.0%OperatingMargin(m)-5.0%30.0%15.0%10.0%TaxRate(T)0.0%20.0%40.0%40.0%CostofCapital(k)15.0%15.0%15.0%15.0%InvestmentRequirementsRate(I)6.0%6.0%6.0%2.0%h=(1+g)/(1+k)1.3531.1570.9130.896Stage1:Period1-5=(1,490)Stage2:Period6-15=19,788Stage3:Period16-20=2,235Stage4:Period21==Inf=4,229TotalPV=24,762$TotalPV/REV115.91TotalPV/NOIstage2,period16.801/(k4-g4)8.33Notes:V0i=PVofStageifreecashflowsattime0.Forexample,V01=PVofStage1freecashflowsattime0TerminalValue=Vn4=(NOIN4+1(1-T4)-RN4+1I4)/(k4-g4)NOIN4+1=NOIforPeriod1inStage4REV1=R1=revenuesforPeriod1inStage1NOI1=netoperatingincomeforPeriod1inStage1[][][][])()1()1()1()1()1(444444321040133332103012222102011111010321321211gkgITmhhhRVhITmhhRVhITmhRVhITmRVnnnnttnnnttnntt-+?--=--=--=?--?=???===Model10-05BGeneral4-StageModel(Basedonrb=g)NetOperatingIncomePeriod0(X0)$2,535Stage1Stage2Stage3Stage4NumberofPeriods(n)5510¥GrowthRateofNetOperatingInc.(g)16.0%22.0%14.0%3.0%TaxRate(T)35.0%35.0%35.0%35.0%CostofCapital(k)11.9%11.9%11.9%11.9%InvestmentOpportunitiesRate(b)130.0%90.0%80.0%20.0%MarginalProfitabilityRate(r)12.3%24.4%17.5%15.0%h=(1+g)/(1+k)1.0371.0901.0190.920Stage1:Period1-5=(2,757)Stage2:Period6-10=1,288Stage3:Period11-20=6,741Stage4:Period21==Inf=33,882TotalPV=39,154$TotalPV/X113.31TotalPV/Xstage2,period16.031/(k4-g4)11.24Notes:V0i=PVofStageifreecashflowsattime0.Forexample,V01=PVofStage1freecashflowsattime0TerminalValue=Vn4=XN4+1(1-T4)(1-b4)/(k4-g4)XN4+1=netoperatingincomeforPeriod1inStage4X1=netoperatingincomeforPeriod1inStage1)()1()1()1()1()1()1()1()1()1(44444321040133321030122210201111010321321211gkgbThhhXVhbThhXVhbThXVhbTXVnnnnttnnnttnntt-+?-?-????=?-?-???=?-?-??=?-?-?=???===