1. Use a discounted cash flow (DCF) analysis to place a value on Sun Microsystems:

-What rate of return should Oracle require on the acquisition?

-What base-case cash flows do you forecast?

-What is your estimate of terminal value?

-What is the enterprise value of Sun Microsystems? What is the equity value?

subsidiaries for operational purposes and to invest the remaining amount of our cash in interest-bearing and highly liquid cash equivalents and marketable debt securities. (2) Deferred taxes and related accounts are not expected to vary with sales or continue to accumulate as a company growth. (3) Includes deferred settlement income from Microsoft as of June 30, 2009, 2008, 2007, and 2006, longterm tax liabilities as of June 30,2009,2008,2007, and 2006, and long-term restructuring liabilities. \begin{tabular}{|c|} \hline Exhibit 12 \\ \hline SUN MICROSYSTEMS \end{tabular} Oracle Historical and Projected Balance Sheet (in millions of U.S. dollars) Exhibit 13 SUN MICROSYSTEMS Oracle Historical and Projected Income Statement (in millions of U.S. dollars) Data sources: Company filings and case writer estimates. subsidiaries for operational purposes and to invest the remaining amount of our cash in interest-bearing and highly liquid cash equivalents and marketable debt securities. (2) Deferred taxes and related accounts are not expected to vary with sales or continue to accumulate as a company growth. (3) Includes deferred settlement income from Microsoft as of June 30, 2009, 2008, 2007, and 2006, longterm tax liabilities as of June 30,2009,2008,2007, and 2006, and long-term restructuring liabilities. \begin{tabular}{|c|} \hline Exhibit 12 \\ \hline SUN MICROSYSTEMS \end{tabular} Oracle Historical and Projected Balance Sheet (in millions of U.S. dollars) Exhibit 13 SUN MICROSYSTEMS Oracle Historical and Projected Income Statement (in millions of U.S. dollars) Data sources: Company filings and case writer estimates