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URL:  https://boards.fool.com/hi-jim-this-is-the-quick-model-i-ran-for-lqdt-29203645.aspx

Subject:  Re: LQDT? Date:  3/29/2011  3:37 PM
Author:  BlazerMania Number:  298 of 1287

Hi Jim,

This is the quick model I ran for LQDT deep dive. At an 11% discount rate, I backed into a 2% growth rate to calculate a value of roughly $15 per share (about what the stock was trading for at the time). However, if I drop the terminal value to zero and up the discount rate to 15%, my value per share dropps to $11. Big difference. Also, I admit to not yet having completed question #5 of this week's homework via my model, so it's always possible my math is wrong as well!

Also, for MUE analysis, are you including net cash in the computations, or are you looking purely at the baked-in growth rates on TTM FCF?



Years 1-5 2.00%
Years 6-10 2.00%
Terminal Value 2.00%
Discount rate 11.00%
--------------

Baseline 28,217
-
Year 1 28,781
Year 2 29,357
Year 3 29,944
Year 4 30,543
Year 5 31,154
Year 6 31,777
Year 7 32,412
Year 8 33,061
Year 9 33,722
Year 10 34,396
--------------
Nominal 343,365
--------------
Discounted 182,502
Terminal 137,290
Cash on BS 76,783
--------------
396,576

Less: Total Debt 0
Less: PV of Operating Leases 0
Less: Value of O/S Options 0
--------------
Cash Equity Value 396,576
Shares O/S 26,000
--------------
Value per Share $15.35
--------------
-
-


Thanks,
Fletch
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