2001 Asset

Value ( in
$76.436
$74.314
$74.31

BCF
EBITDA
After-tax CashFlow

Valuation Using DCF - APV

DCF Valuation
DCF Valuation

VALUATION Using Multiple Analysis

Industry Average
Industry Avg (Corrected)
Mutiple
Value
Multiple
Value
18.1
$1,383
17.25
$1,319
19.4
$1,442
17.42
$1,295
26.1
$1,940
23.55
$1,750

$1,465 Billion

Valuation Based on similar market acquisition

Infinity 1.4 billion or 21.5 X 2000BCF
21.5 65041000
Cost per station

Radio One
Multiple
22.1
24.2
36.5

Assuming BCF multiple

Assuming growing perpetuity

1,398.38 Billion

18 stations

$77.69 Million
70

CFO Anticipated offer

Aftertax cash flow

20X2000 BCF
20 65041000

16303
1999

$1,300.82 billion

$61.94

Per station
Radio One
Value
$1,689
$1,798
$2,712

$62.79
$61.65
$83.34

Year
BCF-New Markets

2001
76,436,000

2002
89,711,000

2003
101,966,000

2004
115,277,000

Total BCF

76,436,000

89,711,000

101,966,000

115,277,000

2,121,750

24,402,585

2,805,938

3,226,905

EBITDA

74,314,250

65,308,415

99,160,063

112,050,095

Depr. & Amort.

90,447,000

90,447,000

90,447,000

90,447,000

(16,132,750)

(25,138,585)

8,713,063

21,603,095

3,049,572

7,561,083

Corporate Expenses

EBIT
Tax
Net Income
Depr. & Amort.
Capital Expenditure
Cash Flow

$ in million
PV Cash Flow =
TV BCF Multiples =

(16,132,750)

(25,138,585)

5,663,491

14,042,012

90,447,000

90,447,000

90,447,000

90,447,000

2,100,000

2,100,000

2,100,000

2,100,000

72,214,250

63,208,415

94,010,491

102,389,012

$235
$2,087

PV TV BCF Multiples

$1,230

DCF VALUATION

$1,465

Growth Rate
PV Cash Flow
TV BCF (g)
PV TV BCF (g)
DCF Valuation
$ in million

Sensitivity Analysis - Varying Growth Rate (Growing Perpetuity)

3.20%
4%
6%
8%
$235
$235
$235
$235

10%
$235

$1,088.67

$1,183.78

$1,503.44

$2,031.78

$3,072.12

$641.70

$697.76

$886.18

$1,197.60

$1,810.82

$877.10

$933.16

$1,121.58

$1,433.00

$2,046.22

Risk Free Rate=

Risk Premium=
Asset Beta=
Asset Return =
Growth Rate=
Corporate Tax Rate=
Ratios assumed to be constant
Corporate Xpense to Potential market -RatioCE
Depreciation & Amort to Potential market -RatioD&A

Radio 1
Radio1 & Acquisitions
Acquisitions
Ratio

Equity
420,256,000

Debt+Equity
527,536,000
107,280,000

Capital Structure to be maintained throughout the projection

WD = weight of Debt
WE= Weight of Equity
NOT USED IN OUR ANALYSIS-

Cannot easily establish tax interest when looking at Balance sh

deferred interest (82.6M) and Deferred income tax 14.5 M, wh

After Tax Cashflow N

= etIncome
74314250
(16,132,750)
12%
$235
$6,068.35

BEquity

$3,576.91

Rate of Debt=

$3,812.31

WACC=

0.9625
0.91
15.51%

Risk Free Rate=

Risk Premium=
Asset Beta=
Asset Return =

6%
9.68%
0.82
14.13%

Growth Rate= 3.20%

Corporate Tax Rate= 35%

onstant
tential market -RatioCE

o Potential market -RatioD&A

Corporate
Expense
4,155,000
6,000,000
1,845,000
30.75%

Depr. & Amort.

17,073,000 Exhibit 6, 1999

107,520,000 Exhibit 9, 1999
90,447,000
Held constant for the projection
84.12%

WD
20.34%
<=Total liability

Data Source

WE
79.66%

maintained throughout the projection

Rd =Debt interest rate???
NOT USED IN OUR ANALYSIS-

tax interest when looking at Balance sheet, I see LT debt &

M) and Deferred income tax 14.5 M, what is my tax shield?

+ Depreciation
90,447,000