Dividend Discount Model (DDM) ($ in millions, except per share data) Two-Stage Model Assumptions Dividends Per Share (DPS) - Current Period Cost of Equity (Ke) Dividend Growth Rate (g): $2.00 6.0% Stage 1 Stage 2 5.0% 3.0% Stage 1 Dividends Dividends Per Share (DPS) Cost of Equity (Ke) Present Value (PV) of Dividend Share Price Calculation PV of Sum of Stage 1 Dividends $9.72 Year 5 Dividend (1+ Stage 2 Growth Rate) $2.63 Stage 2 Terminal Value $87.64 PV of Stage 2 Terminal Value $65.49 Value Per Share ($) $75.21 Stage 1 Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 $2.00 $2.10 $2.21 $2.32 $2.43 $2.55 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% $2.00 $1.98 $1.96 $1.94 $1.93 $1.91