Page 10 - PowerPoint Presentation

FOOTNOTES 10 WEIGHTED AVERAGE COST OF CAPITAL (WACC) Footnotes: (a) Management Estimates (b) Management Estimates (c) Risk Free Rate reflects 20-year treasury yield as of March 28, 2011. (d) Target Beta calculation: Mean of peer group Unlevered Beta, re-levered by the mean of peer group capital structure (D/E). (e) Expected risk premia ranges for equities are based on the differences of the S&P 500 historical arithmetic and geometric mean returns from 1926-2009. Source SBBI 2010 Valuation Book. (f) Small company stock return minus large company stock total return from 1926 - 2006. Source SBBI 2007 Valuation Book. (g) Reflects target capital structure based on peer group mean. Calculated as the peer group mean of individual (Debt / Total Cap). (h) Based on CAPM (Ke), w here Ke = Risk Free Rate + Beta Levered * Market Risk Premia Range + Small Stock Premium. (i) Levered Betas are predicted betas per Barra's as of Mar 28, 2011. (j) Based on Levered Beta. Calculated as : Levered Beta / [1 + (Debt to Total Cap * (1 - Tax Rate))] (k) Management's estimate