Professional Documents
Culture Documents
Actual
1995**
33,251
3,471
12,236
26,900
(9,357)
1996
51,845
5,413
19,079
36,758
(9,405)
1997
80,838
8,439
29,748
49,230
(6,580)
1998
126,044
13,159
46,384
64,157
2,344
1999
196,531
20,518
72,323
80,381
23,309
Estimates
2000
306,434
31,992
112,768
94,688
66,987
2001
477,798
49,882
175,830
99,860
152,226
2002
744,992
77,777
274,157
155,703
237,354
2003
1,161,605
121,272
427,471
242,776
370,087
2004
1,811,197
189,089
666,521
378,540
577,047
2005
2,824,053
294,831
1,039,251
590,227
899,743
0
(9,357)
(12,779)
0
0
0
(9,405)
(22,183)
0
0
0
(6,580)
(28,764)
0
0
0
2,344
(26,419)
0
0
0
23,309
(3,111)
0
0
0
66,987
0
63,876
21,718
0
152,226
0
152,226
51,757
0
237,354
0
237,354
80,701
0
370,087
0
370,087
125,830
0
577,047
0
577,047
196,196
0
899,743
0
899,743
305,913
Net Income
Capital Expenditures
Depreciation
Change in NWC
Net Interest Income
FCFF
TV of FCF
(9,357)
15,229
1,829
0
0
(22,757)
(9,405)
20,721
2,851
0
0
(27,274)
(6,580)
27,593
4,446
0
0
(29,727)
2,344
35,671
6,932
0
0
(26,394)
23,309
44,154
10,809
0
0
(10,036)
45,269
50,970
16,854
0
0
11,152
100,469
51,602
26,279
0
0
75,146
156,654
80,459
40,975
0
0
117,169
244,258
125,453
63,888
0
0
182,693
380,851
195,609
99,616
0
0
284,858
5,569,351
593,831
304,998
155,323
0
0
444,156
Revenues
Costs
R&D
Other Operating Expenses
Operating Income
PV of Cash Flows
PV of TV
Total PV
Total Shares
Price per share
** 1995 Not included in PV
201,141
2,012,403
2,213,544
38,000.75
$58.25
Question 3:
Assumptions given
Growth %
44.95%
Question 4:
Beta equals .5
Beta equals .25
39.79%
33.14%
Question 5:
Tax Rate is 40%
46.94%
Question 6:
COGS equals 8%
43.40%
Question 7:
R&D equal 30%
40.99%
Question 8:
Risk-free Rate 8%
49.01%
Question 9:
Closing Price $58.25*
55.92%
*Source: http://en.wikipedia.org/wiki/Netscape
Appendix
Givens and Scenarios Table
Givens
Growth (1996-2004)
Cost of Revenues
R&D
Other OE (after 2001)
55.92%
10.44%
36.80%
20.90%
10.80%
5.50%
4%
6.50%
0.73
7.50%
34%
1995
80.90%
45.80%
38,000.751
11.98%
Growth %
44.95%
Question 4:
Beta equals .5
Beta equals .25
39.79%
33.14%
Question 5:
Tax Rate is 40%
46.94%
Question 6:
COGS equals 8%
43.40%
Question 7:
R&D equal 30%
40.99%
Question 8:
Risk-free Rate 8%
49.01%
Question 9:
Closing Price $58.25*
55.92%
*Source: http://en.wikipedia.org/wiki/Netscape
1996
80.90%
45.80%
1997
80.90%
45.80%
1998
80.90%
45.80%
1999
80.90%
45.80%
2000
80.90%
45.80%
2001
20.90%
10.80%
Actual
1995**
33,251
3,471
12,236
26,900
(9,357)
1996
48,198
5,032
17,737
34,173
(8,743)
1997
69,866
7,294
25,711
42,548
(5,687)
1998
101,273
10,573
37,269
51,548
1,884
1999
146,800
15,326
54,022
60,041
17,411
0
(9,357)
(12,778)
0
0
0
(8,743)
(21,521)
0
0
0
(5,687)
(27,208)
0
0
0
1,884
(25,324)
0
0
0
17,411
(7,914)
0
0
Net Income
Capital Expenditures
Depreciation
Change in NWC
Net Interest Income
FCFF
TV of FCF
(9,357)
15,229
1,829
0
0
(22,757)
(8,743)
19,263
2,651
0
0
(25,356)
(5,687)
23,848
3,843
0
0
(25,692)
1,884
28,660
5,570
0
0
(21,207)
17,411
32,981
8,074
0
0
(7,497)
Revenues
Costs
R&D
Other Operating Expenses
Operating Income
PV of Cash Flows
PV of TV
Total PV
Total Shares
Price per share
93,605
970,412
1,064,017
38,000.75
$28.00
Estimates
Estimates
2000
212,793
22,216
78,308
65,753
46,517
2001
308,453
32,203
113,511
64,467
98,273
2002
447,116
46,679
164,539
93,447
142,451
2003
648,114
67,663
238,506
135,456
206,489
2004
2005
939,470 1,361,802
98,081
142,172
345,725
501,143
196,349
284,617
299,315
433,870
0
46,517
0
38,603
13,125
0
98,273
0
98,273
33,413
0
142,451
0
142,451
48,433
0
206,489
0
206,489
70,206
0
299,315
0
299,315
101,767
0
433,870
0
433,870
147,516
33,392
35,395
11,704
0
0
9,701
64,860
33,313
16,965
0
0
48,512
94,018
48,289
24,591
0
0
70,321
136,283
69,996
35,646
0
0
101,933
197,548
101,463
51,671
0
0
147,756
2,685,627
286,354
147,075
74,899
0
0
214,179
Givens
Growth (1996-2004)
Cost of Revenues
R&D
Other OE (after 2001)
Capital Expenditures (after
2001)
Depreciation
LT FCF Growth Rate
Risk-free Rate
Netscape Beta
Market Risk-premium
Tax Rate
44.95%
10.44%
36.80%
20.90%
10.80%
5.50%
4%
6.50%
0.73
7.50%
34%
1995
80.90%
45.80%
38,000.751
11.98%
1996
70.900%
39.967%
1997
60.900%
34.133%
1998
50.900%
28.300%
1999
40.900%
22.467%
2000
30.900%
16.633%
2001
20.90%
10.80%