Baird Investment Banking Pitch Book
2) AMGP COST OF EQUITY ANALYSIS
Cost of
Equity
(2)
(3)
(4)
(5)
Risk-free Interest Rate
(3)
Levered Beta (2)
Market Premium
Size Premium (4)
Cost of Equity (5)
CAPM
3.3%
1.61
6.9%
1.4%
15.8%
Source: AMGP filings and Bloomberg.
(1) Represents estimated 20-year treasury rate as of October 5, 2018.
Represents two-year levered equity beta as of February 23, 2018, the date prior to the announcement of the Special Committee formation.
Large company stock total returns minus long-term government bond income returns as computed by Duff & Phelps LLC.
Source: Duff & Phelps LLC size premium based on AMGPs equity market value as of October 5, 2018.
Cost of equity is calculated using CAPM (e.g. cost of equity risk-free interest rate levered equity beta market risk premium size premium).
Confidential
BAIRD
As a result of its cost of equity analysis, Baird
utilizes a range of 14.5% -16.5 % for purposes
of its dividend discount analysis herein
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