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Hi Hewitt,

I'm fairly new here and have a few questions about your analysis.

So instead, let's use 10% growth during years 1-5, followed by 5% growth in years 6-10. Terminal growth begins in year 11, at 3% a year. Assuming a 10% cost of equity, share dilution of 1% a year and adjusting for $787 million of net cash, I arrive at a best-case intrinsic value of $42. If your cost of equity is 11%, then best-case intrinsic value drops to $37. If share count stays flat and your cost of equity is 10%, then intrinsic value is $44.

Are the 10%, 5%, 3% growths pure guesses, or are they based on anything realistic? And what does "cost of equity" mean here? I guess I'm also not sure what your formula is for calculating intrinsic value.

These are probably pretty naive questions but I've got to start somewhere.

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