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1) You forgot to add the current book value to your valuation estimate. You should either add cell I12 to K25-L25, or better, bring in the 2005 book value from the core model ($53,171) in cell H12.
2) Equity charges should be calculated using the previous year's book value. So, I14 should be based on H12, J14 should be based on I12, and so on.
3) The undiscounted terminal value is not calculated using a perpetual cash flow. It should be calculated using the final book value (cell M12 = $87,945), and applying a premium to the book value. I chose a range of 150% to 250% premium (implying P/B ratio of 2.5 to 3.5 at the end of 2010).
Making all of the above changes, I calculated a final share price range of $46.93 -- $58.64. I think that is "reasonable and defensible" since, at the end of the day, RI is theoretically equivalent to DCF. The difference is RI starts at book value instead of zero, and adjusts up or down from there. Read More